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John
I can only speak for trading the T-Bonds. Your stop has to be detirmined
before you enter the trade. The line you draw in the sand will be based
on a number of factors, but having drawn it, you must stick to it. That
is a decision you have made based on market conditions. Having made it,
there is a distinction between activating your stop (in the bonds you will
not have it in the market, per se) and actually exiting the market. If
your stop is set
correctly (and that does not mean an arbitary amount of money that you can
'afford' but rather a point when the market is telling you you are wrong
and it is right!) there will often be a retracement from the market moving
'against' you. That is when you can come out at your price, as it were,
rather than the market's, if you see what I mean?
Some people practise a stop and reverse policy, but that usually gets you a
bad fill. You want to make your decision to exit and then enter again on
your terms, not the market's. I suspect that this cannot be done in most
of the fast markets, but it certainly can be done quite effectively in the
bonds, because it is so liquid and moves at a pace that let's you react
properly!
Hope this helps and aplologies if you don't trade the bonds...
Bill Eykyn
www.dbceuro.com/bille.htm
-----Original Message-----
From: JMAXBragg@xxxxxxx <JMAXBragg@xxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Date: Monday, March 08, 1999 8:12 am
Subject: Exiting a trade
>I would like to get some feedback as to when traders should exit a trade
gone
>bad in day trading, swing trading and long term investing. Your concepts
and
>the reasoning for it would be appreciated.
>
>Thank you,
>
>john
>
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