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Chuck
I'm glad to hear you say that. You're about the first person I've heard say
it. I trade equities only right now and I've never understood why a market
maker or specialist would move a stock 2 points to spike out some stops. I
would require too much capital. Like you say, if trading was thin, I would
understand, easier to do. I've always chalked complaints about that one up
to paranoia or frustration. I also use stops religiously because I've
discovered the hard way too many times that my account suffers if I don't.
Kent
-----Original Message-----
From: CRLeBeau@xxxxxxx <CRLeBeau@xxxxxxx>
To: metastock@xxxxxxxxxxxxx <metastock@xxxxxxxxxxxxx>
Date: Wednesday, April 12, 2000 3:25 AM
Subject: Re: Money Management Stops
In a message dated 4/11/00 9:12:37 PM Pacific Daylight Time,
grt@xxxxxxxxxxxx
writes:
<< While not familiar with your quotation, I thank you for it. >>
Guy,
Its not my quote but a quote from someone who wiped out a $100 million
dollar
fund and then went more than $20 million unsecured. The whole industry knew
he was going to go bust sooner or later. He surprised everyone and managed
to trade without stops for quite a while.
I think that worrying about floor brokers running stops is mostly just
trader
paranoia. In most cases they would have to spend too much money to do it.
Why would someone trade 500 contracts to pick off a five lot stop order?
Doesn't make sense. Now if they could trade five lots to pick off a 500
contract stop order that would make sense. In my opinion the fact that
stops
sometimes get raided is not a sufficient reason not to use them. I think
they are very necessary and if they are set properly they save money in the
long run and perhaps prevent a catastrophe like that suffered by
Neiderhoffer.
Chuck
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