Very Important!
Please read about our stop-loss signals!
We have compiled below a listing of the most popular questions we've been asked. If you have a question, chances are it is listed in our FAQ's. And of course, you can always Contact Us via email if you don't find the answer you are looking for in these pages.
What does your stop-loss signal mean?
Our stop-loss signals are designed to protect our members against losses if the signals generated by our system do not go with the general market trend.
How do you calculate your stop-loss price?
It is based on many factors which include but not limited by the level of
volatility, how strong signal is, what sentiment on the volume and price based
technical indicators is, and etc. This may vary depending on the security chosen, the signal type, and the strength of the defined trend.
If a trader follows your system, does he/she need to place a close order based on your stop-loss price?
Several options may be considered:
- Do not place stop-loss order, but simply wait for our email-alert.
- Do not place stop-loss order, but place it when the index begins to get close to that price.
- To avoid collecting stop-losses at the same point, put your stop-loss in a range of -0.5% / +0.5% around our stop-loss.
- Place a stop-loss order according to your own risk tolerance.
We do not generally recommend setting stop-loss or limit orders based on our stop-loss price because the market has a habit of hitting stop-loss orders simply because they exist. Market makers (the large institutions) have access to a great deal of market data, including where the majority of stop-loss orders are set. If there are enough stop-loss orders set for a specific price, the market will not hesitate to take the stop. You can see evidence of this on 7/21/2003 where the market only passed our QQQQ stop-loss by a few points and then changed directions again. We know from experience that when you set a stop-loss order, the market will not hesitate to take it if there are enough orders set near that price.
What should be done when the stop-loss price is hit?
It depends on a trader's level of risk tolerance. It is up to each individual trader to decide whether to follow our signals and/or our stop-loss system.
If during the market hours the price hits a stop-loss threshold, the "cash"
signal may be generated by the system on the same day. Many of our customers do
not put a stop-loss order at all, they simply wait for a cash signal to close
their position on the market.
Can a new signal be issued when a stop-loss is hit, or do you always remain in cash for at least one day?
Yes, in some cases a new "Long" or "Short" signal with a new stop-loss price could be published on the same day when the price hits our stop-loss. It can be the same signal as the closed one or opposite, however, it depends what our system indicates at this point of time. The situation where a new "Long" signal is issued on the same day when the old "Long" signal was closed or if a new "Short" signal is issued on the same day as when the old "Short" signal was closed may be considered as there were no changes in our signals simply because we still remain in the same position (extra commissions are not paid). This is one of the reasons
some traders do not follow stop-loss, but wait for a signal issued by the system.
P.S. It is totally your decision, what to do when you see our stop-loss signal, depending on your risk tolerance and your type of trading.
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