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May 12, 2004
Experience shows that if enough stop-loss orders are
clustered around a specific price level, the market will not hesitate
to take them out.
In the following example, you can see that on
05/12/2004 the market only traded a little lower than our DIA
stop-loss point, took us out of the trade, then reversed and headed
back up immediately.
- What should I do if our
stop-loss price is hit?
It depends on your personal level of
risk tolerance. It is up to each individual trader to decide
whether or not to follow our signals and/or our stop-loss
procedures.
If our stop-loss is hit, our system automatically generates a
"cash" signal and publishes it. Members who don't wish to use
stop-loss orders, or are unable to, can simply wait for our cash
signal before closing their positions.
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