Go to Jeff Salisbury LWGate Home Page.From: michael_niemotka@baxter.com
Subject: Re: [CANSLIM] STOPs and GRMN and selling rules
Date: Thu, 22 May 2003 07:26:42 -0500
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Yes,
You are correct. If you use a stop loss order, it gets triggered when the
price drops to that point or below, and immediately becomes a market order.
So if the stock is sloping downwards at that point, you could end up with a
larger loss that 8%. In the case of GRMN, my stop losses ending up being
at a 5% gain rather than my expected 8% gain for just that reason.
One way around it would be to use a stop-limit order, which would trigger
when the stock dropped to that price, but then it becomes a limit order, so
you would not sell for less than that price. Again, in the case of GRMN, it
would have locked in my 8% gain, BUT, if GRMN would have continued
downward. my order would NEVER get executed, and I would end the day still
holding the stock, with more loss than I wanted.
Mike
Mike Niemotka , PE
Sr. Principal Engineer
Baxter Healthcare Corporation
Route 120 & Wilson Road
Round Lake, IL 60073
Tel (847) 270-4075
Fax (847) 270-4525
michael_niemotka@baxter.com
jch
<jchjch@earthlink.net> To: canslim@lists.xmission.com
Sent by: cc:
owner-canslim@lists.xm Subject: Re: [CANSLIM] STOPs and GRMN and selling rules
ission.com
05/21/2003 04:44 PM
Please respond to
canslim
Mike: I think he noted desire to stop out 8% below $48--I have another
comment re stops whether they be trailing at some fixed % or a fixed price
rachet, fixed price, or fixed % from purchase..Am I correct in all cases
one could see an 8% stop loss actually balloon to much more during a
volatile trade day as the stop loss executes at the next trade below your
stop loss price?..That's occurred with my trades more than once.
jchjch
>Chuck,
>
>What made you put a stop at $44?
>
>
>
>Mike Niemotka , PE
>Sr. Principal Engineer
>Baxter Healthcare Corporation
>Route 120 & Wilson Road
>Round Lake, IL 60073
>Tel (847) 270-4075
>Fax (847) 270-4525
>michael_niemotka@baxter.com
>
>
>
>
> "Chuck
> Dreier"
>
> <chucknsc@mindspring.c To:
> canslim@lists.xmission.com
> om> cc:
>
> Sent by: Subject: Re:
> [CANSLIM] STOPs and GRMN and selling rules
> owner-canslim@lists.xm
>
> ission.com
>
>
>
>
>
> 05/21/2003 03:44
> PM
>
> Please respond
> to
>
> canslim
>
>
>
>
>
>
>
>
>
>I was in Garmin at approx $25 and watched it rise to $48 (a nearly 100%
>gain!!). Then as it began to fall, I put a $44 stop on it - 8%. Well, I
>stopped out the other day and watched it continue to decline thinking I'd
>done the right thing. I was awaiting the 50 day line at about $39 to see
>how to proceed, and then low and behold - it bounces back this afternoon
on
>major volume. It's up to about $44.90 in after hours trading.
>
>Boy, I'm at a loss about what to do now. I honestly believe GRMN is a
>great company. I jumped off the train, and want back on. But... boy I
>don't want to get whipsawed. The chart isn't helping me make a decision.
>Anyone else been through something like this before?
>
>Thanks...
>Chuck
> ----- Original Message -----
> From: michael_niemotka@baxter.com
> To: canslim@lists.xmission.com
> Sent: Wednesday, May 21, 2003 3:42 PM
> Subject: RE: [CANSLIM] STOPs and GRMN and selling rules
>
>
> While we are still on the subject of trailing stops, it can sometimes
> backfire.
>
> At one point, I was up over 20% in GRMN, after only a three week time
from
> purchase.
> I chose to put in a 15% trailing stop, ie at worst case I would make a
5%
> profit if the stop started to fall. I know some would sell at least a
> portion of the position at a 20% gain, but because it came so quickly, I
> remembered one of WON's rules that said that you should hold a stock
like
> that for at least 8 weeks. He also said that you should NEVER let a
> stock
> that is up 15-20% turn into a loss, so that is why I used a 15% trailer.
>
> And then today, I get the e-mail notice that my stop loss has been
> activated, and then I watch GRMN go on to have a 10% swing during the
day,
> which would leave me at about a 15% gain again.
>
> Overall, I still think GRMN is a great company , and am mad that I got
> booted out with the stop loss, but I think this is something that
everyone
> has to deal with if you plan on being un-emotional, and using rules.
>
> So what would everyone else have done? Should I have had a break even
> stop
> loss instead, since I was only up 20% but it happened within the first 3
> weeks?
>
> Also, what is everyone's interpretation of WON's hold for 8 weeks rule
> when
> you get a high flyer? Do you limit the loss to break even instead, to
> give
> it more leeway for a pullback?
>
> Thanks
>
> Mike
>
> Mike Niemotka , PE
> Sr. Principal Engineer
> Baxter Healthcare Corporation
> Route 120 & Wilson Road
> Round Lake, IL 60073
> Tel (847) 270-4075
> Fax (847) 270-4525
> michael_niemotka@baxter.com
>
>
>
> "Martin Guldenburg"
>
> <martinguldenburg@hotm To:
> canslim@lists.xmission.com
> ail.com> cc:
>
> Sent by: Subject: RE:
> [CANSLIM] STOPs
> owner-canslim@lists.xm
>
> ission.com
>
>
>
> 05/21/2003 02:27 PM
>
> Please respond to
> canslim
>
>
>
>
>
>
>
> Ameritrade offers Trailing Stops
> -Martin
>
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Next Article (by Date): Re: [CANSLIM] STOPs and GRMN and selling rules "David Bojanowski"
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