INSIDEBULLS

[Undertaker]

Dagan,

I use Alexander Elder's system for stops, it works like this:

You set a limit to how much you're willing to lose on any given trade...

The number Elder used was 2%, so if you have a portfolio worth 20,000 then you set your number or loss at $400

So then you buy a 1000 shares of a stock at 1.00 that's $1000.00 to set your stop you minus $400 from 1000, which gives you $600, then you divide the amount of shares you bought into $600 and you get $.60 and this is your stop price so if it trades there you blow it out...

But if the price is rising then every time the stock makes a new inter day high then you recalculate your stop.

For example if the price has made a new inter day high of $1.50 then you would multiply 1000 (Shares) times $1.50 which would give you $1500 then you would subtract $400 which would give you $1100 then you divide it by 1000 and your new stop price would be $1.10

You keep moving it up as the price advances then when it backs off it takes all the ?????????? out of what or where to do !!!

Hope this helps..

UT..