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Humm. Not quit sure how to answer that. But what I will tell you comes from
shorting stocks. My experience has been that most stocks - 99% of them, even an
up trending stock, will always revisit a price on several occasions. Be it on a
pull back or intra day. (Not that I have been in every stock but there are only
so many chart patterns. Once you have seen several the rest can be repeats.)
So I have a strong belief that stocks will always take a breather and pull back
on profit taking. Most of this has comes from experience over the last couple of
years.
Lastly, there is something I believe to be true about the company. Bad earnings
for example.
So my experience has told me that if I blindly short a stock and if it goes
against me under the above condition for a few days. I know I can average out at
a higher price because it will pull back on profit taking or it will revisit my
original entry. So in essence that was the 100 shares at 23 1/2. Since I still
have enough buying power I can average up [that was the100 @ 24 11/16 and the
hesitation at 25 1/6 because I need to manage my portfolio.] and still make a
profit higher up. The balance here is getting to know the stock so that you
don't sit for a month waiting for the price to come down because of draw down. I
have done that and still made a profit.
An exit strategy can be many things. In order of importance to me:
1- how is my stock reacting to the market over the last few days.
2 - Has it been down for a few days in a row and now it might be time to get out
because it is time for it to start heading up again. (This could be associated
with the broader market as well.)
3 - Are my indicators giving me an exit signal.
It is late so I hope I am able to answer your question. I hope this helps.
Harley
UG wrote:
> Harley Meyer writes:
>
> > I thought about covering my 100 shares but I didn't want to book a
> > loss.
>
> Who does? =) On the other hand, would you rather wait and possibly book a
> LARGER loss?
>
> Do you have a rigid exit system, or is your exit system like so many others;
> "by feel".
>
> --
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> http://www.unixgeek.com/cgi-bin/motd.pl - PGP email preferred
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