'Hi Rick, Saw your notes re stop losses and wanted to proffer the following - Not as I know as Im quite new but just some observations: - The books suggesting always using stop losses, were these before or after the onset of mass algorithmic trading? - Are they consistent in the % reduction you should set your stop loss at?'
Some of the books I have read and continue to read go back to the late 90's - early 2,000's (a lot of Darryl Guppy and Louise Bedford) do not mention so much algo's but plenty of comments about smart money and Market Makers which I am supposing are the forces that set these algo's. To be honest I am not really sure when the bots started in earnest. I try to always set my stops just below the most recent strong support level. It tends to work with some and not others. They do not so much set a % as that very much depends on the individual stocks and their prices. For instance one would not allow a -20% stop on a blue chip but would probably have to on a penny stock, and possibly even higher. About self fulfilling prophecies, yes I agree wholeheartedly. If we all see the same sup/res levels, trendlines, what the MACD, RSI are doing well we are probably going to all react like sheep. I am trying really hard to get my head around VPA/VSA, but getting so many mixed signals. @mirren@Cabbie are very good at this and constantly see it different or pick up things that I do not. Notice Cabbie's charts contain very little extra information. For example, watching the smaller spreads and lower volumes regardless of trend direction, you are expecting to see a reversal soon, then all of a sudden there is a long bar continuing the trend which completely mixes up the theory (regardless of news) and I don't know whether I am coming or going. This is I think harder to master than standard TA but will ultimately be more successful if I can do it. At the end of the day, I think it boils down to trying to pick a good stock that is trending up, having confidence in my TA, setting my entry point and then having patience. Books say a lot but there is nothing like trying to do it for real. Many years ago I loved maths at school and was advanced all the way and ended with a job that used maths but this is harder than anything else I have tried in my life. Golden mentioned a couple of times that 3 years ago she had nothing and is now okay, well that to me sounds like a pretty quick time frame, and right now am doubting my ability to replicate that. I think almost everybody on this thread are very smart people and good luck to them. @golden6. Nice to see you got a top up on LTR again today near the lows. I slept overnight so missed the action but at around 40% of my PF I better not buy any more. Anyway, bloody freezing over here, max of 3c most days and we have been below 0 a couple of times. Due to the heart surgery I had I have poor circulation in my extremities so am suffering a bit. Never been so cold in my life. Spend most of my days with WA ABC radio in the background and am so envious of the warm weather. Have a good weekend all.
