I don't know how much more specific I can make this. All my trading is instinct related.... However, I NEVER risk this much of my capital or take on this large of a position, unless I am VERY VERY VERY confident. Praetorian, this doesn't make much sense to me. How can you be "VERY VERY VERY confident" of this trade when you are not sure why you are in it? "Gut instinct" doesn't cut it. The bottom line is you are simply GUESSING the stock will go up. Flying by the seat of your pants and nothing else. With no objective grounds for your position you cannot possibly be "VERY VERY VERY confident." Hell it's hard to be THAT confident about a trade with even a firm supportive argument much less a 'feeling'!
I don't belive in stops. When the reason for the trade disappears, so will my position..... Hi. Other than your 'gut feel' you don't have a (rational) reason for being in this trade.
Prae2 possesses uncanny nimbility(if you will). His ability to move in and out of monster positions is astounding-inexplicable. I have watched him do it over and over and it is still a mystery to me. As Mohammed Ali used to say--"If Mohammed Ali says a fly can pull a plow-hook him up". As for bvsn-I'm in baby.
Hi limbo. If you can't put it into words, you don't have an true or complete understanding of what you do. If you don't know what 'you do', you are going to BLOW UP (eventually). :eek:
<I>I don't belive in stops. When the reason for the trade disappears, so will my position.....</I> This statement is contradictory in the sense that a stop is actually being used when the reason for the trade disappears. When I open a position, with the information I have at that time, if the reason for that trade starts to disappear I have a threshold of confirmation, which may be 3cents or a $1 against before it is established. Then the trade is closed. During the trade(s), information is constantly being gathered. Charts, real time print, volume, futures, indices, level 11 stacks, which players are moving the position and what are they keying off and news on the wire. This all gives reasons on when to open or close. So perhaps the reasons are the stops. I trade anything that moves, nasdaq stocks around a $1 or under, QQQs or others such as SNPS or ISIP. Using a variety of trading styles, holding at times for 6 seconds or overnight on sell offs/rallies near the close. At times holding for a few days waiting for impending news on stocks that I know, such as MFNX. Which readers may find interesting http://boards.fool.com/Message.asp?mid=15652503 I have closed this trade. Discipline is what keeps me from being burnt out. When Iâm not trading I post both on fool.com & fool.co.uk but find that there is far more trader talk and interaction on this board. Snippets of what folks are doing all helps to give us an edge. Keep up the good work. Ken
Short-Rx whatever-The one thing I do have a complete understanding of is that you are an anal sphincter muscle. If I'm not mistaken I was the first one to point this out many moons ago. I shall now go to my ignore button and be rid of you.
TYMJR- I agree, novices need to obey their stops no matter what. The goal of the novice is to remain in the game. I on the otherhand am established, and I'm trying to make the most money possible (with the smallest risk). I feel that not using stops actually takes away most of the risk. Most likely, my gut will turn on me before the actual stop point is triggered anyway (which lets me get out while there is liquidity and before everyone who put their stop at that same obvious level tries to exit). This is an important thing to remember, you can exit a few hundred shares at market whenever you want, but it's impossible to dump 10K+ shares unless there are bids, often bids stack up at previous lows. That's why you must dump before the stop is hit. On the other hand, I find that stops are blown VERY frequently on the NYSE. The specialist knows all the order flow. I will almost never buy until the obvious stop is blown. Therefore, if I'm long, I wouldn't stop out at that point then, but rather buy more. Therefore, I think stops are in general stupid. When the reason for the trade goes away, I'm gonna dump my position. In the case of BVSN, the reason for the trade is a very oversold condition. If the stock just baselines, but doesn't bounce in 2 days, then that oversold condition is worked off, and I'm out. If it goes lower, it just gets more oversold (and juicier). Lower prices always are better b/c you get more value. I think the upside in this situation is probably 30-50c, probably at the lower end of that range.... Therefore, I wouldn't probably risk more than 15c or so anyway. I hate situations where I try and scalp pennies. My order entry ability is awful (especially on the nasdaq). But sometimes it's so damn obvious, that I can't help myself, and I have to get in there to make some money. Shortnfool- I'll take your comments seriously... Please return the favor.... My reason for this trade is that it's a "great new pattern" type of trade. All my trading is done on gut feel. I just feel that it's done going down for a bit. I could be wrong or right, but I've learned to trust my gut. When you've been doing this a while, your gut is normally smarter than your brain. I've learned to just trust a gut feel, b/c it's usually right, and I have the numbers to prove it. My gut says that this stock is a pretty ideal variant of my favorite pattern. Kensmith- I am using a stop I guess, It's just not a numerical type of stop. Bvsn could shoot up on tues, and after 30c, I can say that I "feel" that someone is "pushing" it higher to sell for instance, and I'll want out immediately, and just put all my stock into one giant soes and fire away a nickle under the bid. It's whenever my gut says this doesn't "feel" right. You are right, if you don't have some stop, you'll get burnt eventually. ------------------ I hope this answers all the questions. It's kinda hard to explain a statement like "stops are for pussies" which is one of my favorite phrases, but I just live by it, cause there are too many times that a specialist will find some way to stop you out at the bottom. If you know what you're looking for, you'll buy from those people who are stopping out.
Pre I have watched you trade. You do use stops but not an actual #'s. If the trade isn't acting like you wish than you are out. You could quantify this on a # level also but that # would be much further away from the market. I'd be extremely worried if you held on to a trade no matter what. That would mean you don't use stops. Pretorian2 will exit a trade if something isn't right and has exited trades that have gone against him. The question then is where and under what conditions will you get out on. Gut feel is great but sometimes it can be hard to tell gut feel or intuition from intowishing..... You also have a profit taking exit too from what I've seen. Rtharp
Praetorian, if you haven't a rational explicit reason for being in the trade, then you cannot possibly have a rational explicit stop to exit a bad trade. How can you place a tight stoploss on bvsn for instance if you haven't a clear notion for being in the trade in the first place? You cannot know when the trade is no longer valid because you haven't established any standard by which to measure the trade's performance. So how could you know when that standard is violated? Do you see this? Addionally, "Gut feels" are fuzzy and inexact by their very nature. So claiming you are setting a "tight" stop is contradictory and impossible. Hypothetically, what if bvsn drops 10c one hour after the open, will you buy more or exit? what about 20c? how about 30c? At what point do you "know" trade is bad invalid? How can you recognize "invalidity" when you haven't established "validity"?
"If the trade isn't acting like you wish than you are out. You could quantify this on a # level also but that # would be much further away from the market." Hi tharp. How can you possibly recognize that a trade is acting badly if you haven't first established a clear objective rationale for the trade? What standard could you use to conclude the trade is bad if you haven't a clear known reason for the trade? "You also have a profit taking exit too from what I've seen." HUH? I can't figure this one out.