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Actually, I would not use a Break-Even stop either. The reason being
that when one is investing for the long-term, the short-term
fluctuations may take out the Break-Even stop, leaving you flat. The
only stop I would use is a worst case stop-loss based on fundamentals.
I find it rather silly and unnecessary to use a profit target. I might
consider using a limit order to sell at projected high of the day. I
would just exit at the open or close when circumstances warrant it.
When the framework of evidence collapes, the architecture is merely an
illusion, a mirage, or in other words, castles in the air. If my
beliefs cause shock in others, my sincere apologies...
rgds, Pal
--- In amibroker@xxxxxxxxxxxxxxx, "yukitaga" <yukitaga@xxxx> wrote:
>
> Someone who shall remain nameless tossed out this gem for serious
> consideration (watch the line wrap):
>
> > Is exiting a portion of your trade before your profit target is
> > hit a viable strategy?
>
> (watch the line wrap)
>
> http://www.traders.com/Documentation/FEEDbk_docs/Abstracts_new/Passam
> onte/Passamonte.html
>
> The guy who wrote this is a real kick. ^^_^^ First, he begins his
> article with an invocation to the sanctity of mathematics, which I
> don't really have a problem with. But then he proceeds to set up a
> straw man using statistics, which Mark Twain had a commentary on
> something to the superlative of 'damned lies'.
>
> (If you have never read "Letters From The Earth" [Mark Twain], you
> are missing one of the great satirical writings in the English
> language. I don't literally ROTFLOL very often, but I did many
> times when reading that book.)
>
> The whole *point* of taking something off the table before some
> profit target is hit seems to be beyond this self-
> proclaimed "professional trader" who (I paraphrase) doesn't bother
> with a "few points" on the S&P, but who holds out for 5 to 10 points
> or more on every trade.
>
> I'm impressed . . . ^^_^^ No, really! ^^_^^ I love taking the
> other side of the trade against people who know where the market is
> headed before it arrives there, and who aren't going to take
> any "nonsenese" from the market if it happens to disagree.
>
> But this God's gift to trading doesn't even seem to understand that
> one RAISES THE STOP when one takes a partial profit on a position.
> The whole point, the only point, and the point that counts is:
> DEFENSE. That is why one takes partial profits. One does not do it
> attempting to maximize profits, but to protect capital.
> Maximization of profit is wonderful. Hey, I'm all for it. But only
> AFTER the defense is set up. Before that, the whole idea is
> balderdash and hooey gooey poppycock. Perhaps someone else has
> better and more modern adjectives. My English is dated. In any
> case, defense first, and anyone who doesn't play that way is dead
> meat in this business.
>
> But the silly little argument with charts in that article has
> someone taking a profit, then leaving the stop below breakeven.
>
> Duh! Gee, I wonder why the math works out like that? *_*
>
> Sorry, but I just couldn't let that little bit of 3-card Monty go
> without a challenge.
>
> Yuki
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