You're right Dennis , but it gives them the basic idea for calculating a stop...
As you've all seen from my trading a lot of times I sell way too soon, the reason for this is when we're trading a unstable or higher risk positions, playing the support and resistance ( Like Dennis was saying)is better...
I think the whole point of the system is to get you out of something and take the decision out of what to do when a position goes against you...
I know in my earlier days (and still have done it lately the odd time by mistake)is to buy something, hold on it goes against you then you say "It'll come back...." then it drops more and you say " Well I gotta hold it now" then it drops a bunch more and you say " Holey cow I gotta get something out of it..." then you wash it out... where if you had the stop in the first place I only would have taken a small hit and then had the freedom to reevaluate the position and reenter if it looked good...
You can work the system with smaller amounts of money...but you have to take into account the size of the float in the issue and it's price range...
These as just my thoughts and my trading system and style...I hope you can find some useful material here...
UT..
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