Go to Jeff Salisbury LWGate Home Page.From: "Dan Forant" <dforant1@nycap.rr.com>
Subject: Re: [CANSLIM] Buy Stop Limit orders?
Date: Sun, 8 Sep 2002 07:26:15 -0400
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To me it depends upon how much guts you have. You can lose some serious =
money with sell stop limit orders. It may never exercise. And lose some =
valuable gains with buy stop limits. I have noticed in the latter that =
the stock will fall back to the buy stop limit during the day or next, =
especially in this bottoming market. I only worry about gaps, so I set =
buy stop limits for overnight orders for next day opening, if I won't =
have access. Once the market is open and I have access I switch to buy =
stop orders. Using only stop orders for sells. If the stock gaps down =
and the order is executed one could always re-buy the stock if there is =
enough faith in it moving back up. It's all about risk toleration.
DanF
----- Original Message -----=20
From: John Calkins=20
To: canslim@lists.xmission.com=20
Sent: Saturday, September 07, 2002 11:52 PM
Subject: Re: [CANSLIM] Buy Stop Limit orders?
Thanks Tom and Bond.......James Bond for all these great examples. =
This is a real education on execution of trades.
I can see the advantage of the buy stop limit order with keeping you =
above the pivot and below an extended price except you might end up =
buying on low volume. Do you and others prefer this method when you =
cannot get to your trading device during the day or do you use it =
regularly?
And I can see the advantage of the sell stop order, but I've been =
caught so many times in these gap down situations that I'm wondering if =
I should place my sell stop above the pivot point so I can get the heck =
out, or does this change with the market? I find myself checking all =
the time to see what the action is when I can, its just I can't seem to =
get in front of a computer or on the phone at the most important time. =
I would like to set hard stops if they work for me. =20
Now the sell stop limit orders have me confused. I do see that at =
least half of the time a stock will take a bounce so I can understand =
some of the logic of a sell stop limit order of not carrying you to the =
basement, but isn't it better to find a sell stop that might get you and =
up-tic like above one of the areas of resistance?
I keep telling myself if I could only just be there at the right time, =
I could improve my trades....but this is a fallacy isn't it. It doesn't =
matter if you get there or not, there are always surprises that fowl up =
your trade, its just finding a method like James's by looking at action =
during the days before that will support your move..........after you =
burn yourself enough times, you put the gloves on ea?
Next question. I keep telling myself, if I had the perfect stock =
alert set then I could act on the volume. I see where MSN had price and =
volume. I used this for a while instead of the hard stops. My cell =
would give me the alert that my price or volume or both had been hit and =
then I would be able to make a little more timely decision. Is this =
again another inexperienced trader thinking that he's got the greatest =
plan, just to have it fail? Half the time my Verizon phone won't get =
the alert for some reason.
This all just keeps coming back to such a small area of trading in the =
pivot and break out that everyone try's to hit. It eventually seems to =
go in the direction that the short sellers want. IBD say wait for the =
market but then say the best moves are off the bottom. If the market =
has moved 20% off the last bottom I just missed it again somehow.
I'm getting quite gun shy. I'm capitulating.
(JC)
----- Original Message -----=20
From: Tom Worley=20
To: canslim@lists.xmission.com=20
Sent: Friday, September 06, 2002 7:24 PM
Subject: Re: [CANSLIM] Buy Stop Limit orders?
Nancy, a stop order converts to a market order (wherever the market =
is then). A stop LIMIT order converts to a LIMIT order (again, wherever =
the market is). So if the stop price is hit by a big gap, then the stop =
order becomes a market, and naturally executes, altho at a price that =
may be a real surprise. A stop LIMIT order, because it now is a LIMIT =
order, may not execute if the market moved outside of the LIMIT range.
Example: you find an absolutely perfect, classic, textbook cup and =
handle. Can't find a single thing wrong with either the chart or its =
fundamentals, even after exhaustive hours of due diligence (ok, I admit =
it, I like to fantasize).
You determine that the perfect pivot point is exactly $25.20, so you =
enter a Buy Stop order at $25.30. Your friend, however, enters a Buy =
Stop LIMIT order at Buy Stop $25.30, LIMIT $26.46 (5% over the pivot). =
Shortly before the open, the company announces that it has accepted a =
cash buyout at $29, and the stock gaps to that price (or higher, or just =
under) as the shorts immediately cover. Your buy is executed at around =
$29, and the best you can hope for is to sell at a breakeven, if you are =
lucky cover transaction costs. Your friend's order never executes =
because of the LIMIT and is able to simply cancel the order when the =
news is discovered.
Exactly the same thing can happen on a Sell Stop / Sell Stop LIMIT =
order. A stop order means you take what the market gives you, and can be =
triggered when the volume might have kept you out of the trade entirely. =
A stop LIMIT order means you may never get an execution, but may have a =
second chance to evaluate the situation, and change the order, or cancel =
it entirely.
As one further comment, many firms still will not accept Stop LIMIT =
orders on NASDAQ stocks, especially if they are not very liquid.
----- Original Message -----=20
From: NANCY POLCARO=20
To: canslim=20
Sent: Friday, September 06, 2002 4:10 PM
Subject: Re: [CANSLIM] Buy Stop Limit orders?
which is right? One says a stop order will always execute somewhere =
even if it is not at the stop price( this is what I thought) and one =
says the market can pass through the stop and it will never be executed. =
They both can not be correct. Advice from the more experienced then I =
please. Thanks again for the help nancy
----- Original Message -----
From: Dan Forant
Sent: Friday, September 06, 2002 10:57 AM
To: canslim@lists.xmission.com
Subject: Re: [CANSLIM] Buy Stop Limit orders?
A stop order, buy or sell will always execute (somewhere). A Stop =
Limit
order may not if the market blows up through the stop *limit*.
DanF
----- Original Message -----
From: "david frank" <camelot.homes@charter.net>
To: <canslim@lists.xmission.com>
Sent: Friday, September 06, 2002 12:53 PM
Subject: Re: [CANSLIM] Buy Stop Limit orders?
> Warren, the bad thing about a stop order is that it is a =
secondary order.
A
> broker doesn't have to execute it, thereby, you don't really =
have any
> recourse, if it is not executed, although the price of the stock =
was
within
> your price parameters. If the price of the stock is outside of =
your stop,
it
> will not execute. dave
> ----- Original Message -----
> From: "Warren Keuffel" <wkeuffel@xmission.com>
> To: "CANSLIM list" <canslim@lists.xmission.com>
> Sent: Friday, September 06, 2002 10:55 AM
> Subject: [CANSLIM] Buy Stop Limit orders?
>
>
> > I am curious (yellow) -- sorry, bad joke that will be =
undersood only by
> > those of a certain age, if no one "gets" it I will explain, if =
asked --
> >
> > anyway, back to the subject -- whether people here have used =
buy stop
> > limit orders to trigger a purchase if the price of a stock =
rises above
> > the limit price. You would need to use this with some sort of =
manual or
> > automatic scan for increased volume to make a good buy on a =
breakout,
> > but given the volume, seems like a buy stop limit order would =
help one
> > buy at the pivot point. Or not?
> >
> > Thanks,
> > Warren
> >
> >
> > -
> > -To subscribe/unsubscribe, email "majordomo@xmission.com"
> > -In the email body, write "subscribe canslim" or
> > -"unsubscribe canslim". Do not use quotes in your email.
>
>
> -
> -To subscribe/unsubscribe, email "majordomo@xmission.com"
> -In the email body, write "subscribe canslim" or
> -"unsubscribe canslim". Do not use quotes in your email.
>
-
-To subscribe/unsubscribe, email "majordomo@xmission.com"
-In the email body, write "subscribe canslim" or
-"unsubscribe canslim". Do not use quotes in your email.
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<HTML><HEAD>
<META http-equiv=3DContent-Type content=3D"text/html; =
charset=3Diso-8859-1">
<META content=3D"MSHTML 6.00.2716.2200" name=3DGENERATOR>
<STYLE></STYLE>
</HEAD>
<BODY=20
style=3D"BORDER-RIGHT: medium none; BORDER-TOP: medium none; FONT: 10pt =
verdana; BORDER-LEFT: medium none; BORDER-BOTTOM: medium none"=20
bgColor=3D#ffffff>
<DIV><FONT face=3DArial>To me it depends upon how much guts you have. =
You can lose=20
some serious money with sell stop limit orders. It may never exercise. =
And lose=20
some valuable gains with buy stop limits. I have noticed in the latter =
that the=20
stock will fall back to the buy stop limit during the day or next, =
especially in=20
this bottoming market. I only worry about gaps, so I set buy stop limits =
for=20
overnight orders for next day opening, if I won't have access. =
Once the=20
market is open and I have access I switch to buy stop orders. Using only =
stop=20
orders for sells. If the stock gaps down and the order is executed one =
could=20
always re-buy the stock if there is enough faith in it moving back up. =
It's all=20
about risk toleration.</FONT></DIV>
<DIV><FONT face=3DArial></FONT> </DIV>
<DIV><FONT face=3DArial>DanF</FONT></DIV>
<BLOCKQUOTE dir=3Dltr=20
style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; =
BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
<DIV style=3D"FONT: 10pt arial">----- Original Message ----- </DIV>
<DIV=20
style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: =
black"><B>From:</B>=20
<A title=3Djcalkins@olypen.com =
href=3D"mailto:jcalkins@olypen.com">John=20
Calkins</A> </DIV>
<DIV style=3D"FONT: 10pt arial"><B>To:</B> <A =
title=3Dcanslim@lists.xmission.com=20
=
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Saturday, September 07, =
2002 11:52=20
PM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> Re: [CANSLIM] Buy Stop =
Limit=20
orders?</DIV>
<DIV><BR></DIV>
<DIV><FONT face=3DArial size=3D3>Thanks Tom and Bond.......James Bond =
for all=20
these great examples. This is a real education on execution of=20
trades.</FONT></DIV>
<DIV><FONT face=3DArial size=3D3></FONT> </DIV>
<DIV><FONT face=3DArial size=3D3>I can see the advantage of the buy =
stop limit=20
order with keeping you above the pivot and below an extended price =
except you=20
might end up buying on low volume. Do you and others prefer this =
method=20
when you cannot get to your trading device during the day or do you =
use it=20
regularly?</FONT></DIV>
<DIV><FONT face=3DArial size=3D3></FONT> </DIV>
<DIV><FONT face=3DArial size=3D3>And I can see the advantage of =
the sell stop=20
order, but I've been caught so many times in these gap down situations =
that=20
I'm wondering if I should place my sell stop above the pivot point so =
I can=20
get the heck out, or does this change with the market? I =
find=20
myself checking all the time to see what the action is when I can, its =
just I=20
can't seem to get in front of a computer or on the phone at the most =
important=20
time. I would like to set hard stops if they work for me. =20
</FONT></DIV>
<DIV><FONT face=3DArial size=3D3></FONT> </DIV>
<DIV><FONT face=3DArial size=3D3>Now the sell stop limit orders have =
me=20
confused. I do see that at least half of the time a stock will =
take a=20
bounce so I can understand some of the logic of a sell stop limit =
order of not=20
carrying you to the basement, but isn't it better to find a sell stop =
that=20
might get you and up-tic like above one of the areas of=20
resistance?</FONT></DIV>
<DIV><FONT face=3DArial size=3D3></FONT> </DIV>
<DIV><FONT face=3DArial size=3D3>I keep telling myself if I could only =
just be=20
there at the right time, I could improve my trades....but this is a =
fallacy=20
isn't it. It doesn't matter if you get there or not, there are =
always=20
surprises that fowl up your trade, its just finding a method like=20
James's by looking at action during the days before that will =
support=20
your move..........after you burn yourself enough times, you put the =
gloves on=20
ea?</FONT></DIV>
<DIV><FONT face=3DArial size=3D3></FONT> </DIV>
<DIV><FONT face=3DArial size=3D3>Next question. I keep telling =
myself, if I=20
had the perfect stock alert set then I could act on the volume. =
I see=20
where MSN had price and volume. I used this for a while instead =
of the=20
hard stops. My cell would give me the alert that my price or =
volume or=20
both had been hit and then I would be able to make a little more =
timely=20
decision. Is this again another inexperienced trader thinking =
that he's=20
got the greatest plan, just to have it fail? Half the time my =
Verizon=20
phone won't get the alert for some reason.</FONT></DIV>
<DIV><FONT face=3DArial size=3D3></FONT> </DIV>
<DIV><FONT face=3DArial size=3D3>This all just keeps coming back to =
such a small=20
area of trading in the pivot and break out that everyone try's =
to hit.=20
It eventually seems to go in the direction that the short sellers =
want. =20
IBD say wait for the market but then say the best moves are off the=20
bottom. If the market has moved 20% off the last bottom I just =
missed it=20
again somehow.</FONT></DIV>
<DIV><FONT face=3DArial size=3D3></FONT> </DIV>
<DIV><FONT face=3DArial size=3D3>I'm getting quite gun shy. I'm=20
capitulating.</FONT></DIV>
<DIV><FONT face=3DArial size=3D3></FONT> </DIV>
<DIV><FONT face=3DArial size=3D3>(JC)</FONT></DIV>
<DIV><FONT face=3DArial></FONT> </DIV>
<DIV><FONT face=3DArial></FONT> </DIV>
<BLOCKQUOTE dir=3Dltr=20
style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; =
BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
<DIV style=3D"FONT: 10pt arial">----- Original Message ----- </DIV>
<DIV=20
style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: =
black"><B>From:</B>=20
<A title=3Dstkguru@bellsouth.net =
href=3D"mailto:stkguru@bellsouth.net">Tom=20
Worley</A> </DIV>
<DIV style=3D"FONT: 10pt arial"><B>To:</B> <A =
title=3Dcanslim@lists.xmission.com=20
=
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
=20
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Friday, September 06, =
2002 7:24=20
PM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> Re: [CANSLIM] Buy =
Stop Limit=20
orders?</DIV>
<DIV><BR></DIV>
<DIV><FONT face=3DArial size=3D3>Nancy, a stop order converts to a =
market order=20
(wherever the market is then). A stop LIMIT order converts to a =
LIMIT order=20
(again, wherever the market is). So if the stop price is hit by a =
big gap,=20
then the stop order becomes a market, and naturally executes, altho =
at a=20
price that may be a real surprise. A stop LIMIT order, because it =
now is a=20
LIMIT order, may not execute if the market moved outside of the =
LIMIT=20
range.</FONT></DIV>
<DIV><FONT face=3DArial size=3D3></FONT> </DIV>
<DIV><FONT face=3DArial size=3D3>Example: you find an absolutely =
perfect,=20
classic, textbook cup and handle. Can't find a single thing wrong =
with=20
either the chart or its fundamentals, even after exhaustive hours of =
due=20
diligence (ok, I admit it, I like to fantasize).</FONT></DIV>
<DIV><FONT face=3DArial size=3D3></FONT> </DIV>
<DIV><FONT face=3DArial size=3D3>You determine that the perfect =
pivot point is=20
exactly $25.20, so you enter a Buy Stop order at $25.30. Your =
friend,=20
however, enters a Buy Stop LIMIT order at Buy Stop $25.30, LIMIT =
$26.46 (5%=20
over the pivot). Shortly before the open, the company announces that =
it has=20
accepted a cash buyout at $29, and the stock gaps to that price (or =
higher,=20
or just under) as the shorts immediately cover. Your buy is executed =
at=20
around $29, and the best you can hope for is to sell at a breakeven, =
if you=20
are lucky cover transaction costs. Your friend's order never =
executes=20
because of the LIMIT and is able to simply cancel the order when the =
news is=20
discovered.</FONT></DIV>
<DIV><FONT face=3DArial size=3D3></FONT> </DIV>
<DIV><FONT face=3DArial size=3D3>Exactly the same thing can happen =
on a Sell=20
Stop / Sell Stop LIMIT order. A stop order means you take what the =
market=20
gives you, and can be triggered when the volume might have kept you =
out of=20
the trade entirely. A stop LIMIT order means you may never get an =
execution,=20
but may have a second chance to evaluate the situation, and change =
the=20
order, or cancel it entirely.</FONT></DIV>
<DIV><FONT face=3DArial size=3D3></FONT> </DIV>
<DIV><FONT face=3DArial size=3D3>As one further comment, many firms =
still will=20
not accept Stop LIMIT orders on NASDAQ stocks, especially if they =
are not=20
very liquid.</FONT></DIV>
<DIV><FONT face=3DArial size=3D3></FONT> </DIV>
<DIV style=3D"FONT: 10pt arial">----- Original Message -----=20
<DIV style=3D"BACKGROUND: #e4e4e4; font-color: black"><B>From:</B> =
<A=20
title=3DZILLAGIRL@msn.com href=3D"mailto:ZILLAGIRL@msn.com">NANCY =
POLCARO</A>=20
</DIV>
<DIV><B>To:</B> <A title=3Dcanslim@lists.xmission.com=20
href=3D"mailto:canslim@lists.xmission.com">canslim</A> </DIV>
<DIV><B>Sent:</B> Friday, September 06, 2002 4:10 PM</DIV>
<DIV><B>Subject:</B> Re: [CANSLIM] Buy Stop Limit =
orders?</DIV></DIV>
<DIV><BR></DIV>
<DIV>which is right? One says a stop order will always =
execute=20
somewhere even if it is not at the stop price( this is what I =
thought) and=20
one says the market can pass through the stop and it will never =
be=20
executed. They both can not be correct. Advice from the =
more=20
experienced then I please. Thanks again for the help =
nancy</DIV>
<DIV> </DIV>
<BLOCKQUOTE=20
style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; =
BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
<DIV style=3D"FONT: 10pt Arial">----- Original Message -----</DIV>
<DIV=20
style=3D"BACKGROUND: #e4e4e4; FONT: 10pt Arial; COLOR: =
black"><B>From:</B>=20
Dan Forant</DIV>
<DIV style=3D"FONT: 10pt Arial"><B>Sent:</B> Friday, September 06, =
2002=20
10:57 AM</DIV>
<DIV style=3D"FONT: 10pt Arial"><B>To:</B> =
canslim@lists.xmission.com</DIV>
<DIV style=3D"FONT: 10pt Arial"><B>Subject:</B> Re: [CANSLIM] Buy =
Stop Limit=20
orders?</DIV>
<DIV> </DIV>A stop order, buy or sell will always execute=20
(somewhere). A Stop Limit<BR>order may not if the market blows up =
through=20
the stop *limit*.<BR><BR>DanF<BR>----- Original Message =
- -----<BR>From:=20
"david frank" <camelot.homes@charter.net><BR>To:=20
<canslim@lists.xmission.com><BR>Sent: Friday, September 06, =
2002=20
12:53 PM<BR>Subject: Re: [CANSLIM] Buy Stop Limit =
orders?<BR><BR><BR>>=20
Warren, the bad thing about a stop order is that it is a secondary =
order.<BR>A<BR>> broker doesn't have to execute it, thereby, =
you don't=20
really have any<BR>> recourse, if it is not executed, although =
the=20
price of the stock was<BR>within<BR>> your price parameters. If =
the=20
price of the stock is outside of your stop,<BR>it<BR>> will not =
execute. dave<BR>> ----- Original Message -----<BR>> From: =
"Warren=20
Keuffel" <wkeuffel@xmission.com><BR>> To: "CANSLIM list"=20
<canslim@lists.xmission.com><BR>> Sent: Friday, September =
06,=20
2002 10:55 AM<BR>> Subject: [CANSLIM] Buy Stop Limit=20
orders?<BR>><BR>><BR>> > I am curious (yellow) -- =
sorry, bad=20
joke that will be undersood only by<BR>> > those of a =
certain age,=20
if no one "gets" it I will explain, if asked --<BR>> =
><BR>> >=20
anyway, back to the subject -- whether people here have used buy=20
stop<BR>> > limit orders to trigger a purchase if the price =
of a=20
stock rises above<BR>> > the limit price. You would need to =
use this=20
with some sort of manual or<BR>> > automatic scan for =
increased=20
volume to make a good buy on a breakout,<BR>> > but given =
the=20
volume, seems like a buy stop limit order would help one<BR>> =
> buy=20
at the pivot point. Or not?<BR>> ><BR>> > =
Thanks,<BR>> >=20
Warren<BR>> ><BR>> ><BR>> > -<BR>> > -To=20
subscribe/unsubscribe, email "majordomo@xmission.com"<BR>> > =
- -In the=20
email body, write "subscribe canslim" or<BR>> > =
- -"unsubscribe=20
canslim". Do not use quotes in your =
email.<BR>><BR>><BR>>=20
-<BR>> -To subscribe/unsubscribe, email=20
"majordomo@xmission.com"<BR>> -In the email body, write =
"subscribe=20
canslim" or<BR>> -"unsubscribe canslim". Do not use =
quotes in=20
your email.<BR>><BR><BR><BR>-<BR>-To subscribe/unsubscribe, =
email=20
"majordomo@xmission.com"<BR>-In the email body, write "subscribe =
canslim"=20
or<BR>-"unsubscribe canslim". Do not use quotes in your=20
email.<BR></BLOCKQUOTE></BLOCKQUOTE></BLOCKQUOTE></BODY></HTML>
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- -To subscribe/unsubscribe, email "majordomo@xmission.com"
- -In the email body, write "subscribe canslim" or
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