{"id":481,"date":"2005-01-24T00:24:31","date_gmt":"2005-01-24T05:24:31","guid":{"rendered":"http:\/\/selfinvestors.com\/tradingstocks\/mail-bag\/discussion-of-a-short-trade-dont-place-stops-at-whole-numbers\/"},"modified":"2005-01-24T00:24:31","modified_gmt":"2005-01-24T05:24:31","slug":"discussion-of-a-short-trade-dont-place-stops-at-whole-numbers","status":"publish","type":"post","link":"https:\/\/selfinvestors.com\/tradingstocks\/mail-bag\/discussion-of-a-short-trade-dont-place-stops-at-whole-numbers\/","title":{"rendered":"Discussion of a Short Trade – Don’t Place Stops At Whole Numbers"},"content":{"rendered":"

Question<\/strong>:<\/p>\n

Would you cover on an intra-day bounce above 31 or closing above 31?<\/p>\n

My Response<\/strong>:<\/p>\n

The reason for waiting until market close would be  to see what the so
\ncalled "smart money" will do (institutions do much of their trading in
\nthe last hour of the day).  Many traders will avoid making a sell decision
\n(or in this case, a cover decision until then).  However, if SFA surges
\nabove 31with heavy volume I would be covering regardless of when that occurs,
\nconsidering that volume levels will tell you what institutions are
\ndoing. The only exception might be in the first 30 – 60 min. of trading, where I
\ntypically avoid making any trading decision.  <\/p>\n

Follow up question<\/strong>:<\/p>\n

Thanks.  Just curious, do you use more of a mental stop than a hard stop
\norder so you can watch volume?  And if SFA goes above 31 on light volume
\nwill you not sell.<\/p>\n

Since I don’t trade full time and have trouble monitoring trades
\nthroughout the day I enter stop orders immediately after a trade has
\nbeen entered.  I have placed my stop on SFA at 31.  This seems to work
\nbest for me but always open to suggestions if you have any (I feel exits
\nare one of the more important aspects to trading and always looking to
\nimprove in this area).<\/p>\n

My Response<\/strong>:<\/p>\n

Since I am able to watch the market most days, I don’t use stop orders.
\nThis way I can base my decision on volume levels as well as the strength
\nof the market.  To answer your question, I would be less likely to cover if
\nthe stock rises through resistance with light volume.  Although, it would be
\nsurprising to see it get past those resistance levels with light volume.<\/font><\/p>\n

Most are not able to watch the market during the day, so you MUST use
\nstops.  Here’s a hint though.  Never place a stop on a whole number.  You
\nincrease your chances of getting shaken out.  Remember that market makers know
\nall stop loss levels.  It is human nature to want to set stops at even numbers,
\nso there will be a large number of stops at those places.  Market makers
\nmay run a stock up in order to cause a short squeeze.  I don’t want to get
\ntoo complicated here.. make sure you place stops at odd numbers where others
\nwont’.  So maybe 31.23 or something like that.<\/font><\/p>\n","protected":false},"excerpt":{"rendered":"

Question: Would you cover on an intra-day bounce above 31 or closing above 31? My Response: The reason for waiting until market close would be  to see what the so called "smart money" will do (institutions do much of their trading in the last hour of the day).  Many traders will avoid making a sell … Continue reading Discussion of a Short Trade – Don’t Place Stops At Whole Numbers<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[19],"tags":[],"class_list":["post-481","post","type-post","status-publish","format-standard","hentry","category-mail-bag"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/selfinvestors.com\/tradingstocks\/wp-json\/wp\/v2\/posts\/481","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/selfinvestors.com\/tradingstocks\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/selfinvestors.com\/tradingstocks\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/selfinvestors.com\/tradingstocks\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/selfinvestors.com\/tradingstocks\/wp-json\/wp\/v2\/comments?post=481"}],"version-history":[{"count":0,"href":"https:\/\/selfinvestors.com\/tradingstocks\/wp-json\/wp\/v2\/posts\/481\/revisions"}],"wp:attachment":[{"href":"https:\/\/selfinvestors.com\/tradingstocks\/wp-json\/wp\/v2\/media?parent=481"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/selfinvestors.com\/tradingstocks\/wp-json\/wp\/v2\/categories?post=481"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/selfinvestors.com\/tradingstocks\/wp-json\/wp\/v2\/tags?post=481"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}