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Hello, Peter:
On 30-Dec-00, Peter Carr wrote:
> Do you use any formula for assessing a profit target? Is there a
> recommended acceptable level to achieve/aim for?
To start, keep it simple & don't get hung up on a partiular number or formula
- be flexible.
Make sure the method you use to make a target fits with the stock's profile.
You won't want to apply a method which uses volitility of a stock that doesn't
have any ups & downs.
If you short volitile stocks, you could use a 50% retracement or a similar
fibonacci number as a goal. On the long side, you will probably have less sure
sell points, because there may be fewer reference points, i.e. if the stock is
always trending up.
You should also keep resistance/support levels in mind, too.
That's one reason why longer histories are necessary.
If you are buying for your longer term portfolio, you could use
zero-cost-averaging at a +-20% or 25% level, to buy into a volitile stock.
If you are unsure, you could always set reasonably obtainable dollar-profit
stops of, say, around $800-1000. If nothing else, it's easy to do & has low
maintenance.
Remember, with trading, your goal is not necessarily to pick a top or bottom,
but lower risk by getting the most out of a move, without much wastage.
--
---===///||| Donald Dalley |||\\\===---
The World of AmiBroker Support
http://webhome.idirect.com/~ddalley
UIN/ICQ#: 65203020
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