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Hello,
An esignal member by the username of michaelm helped be work out an stop-loss system but I'm still a little confused. I wonder if someone could figure out how he arrived at the figures. Anyway this is what he said:
Determine Stop-Loss Point (from initial entry):
(this is more tricky, and you may want to read more from Lukeman's book about how he determines initial stop loss, but in general...)
for the $50 stock, if you trade the 200 shares, and your Max Dollar Risk is $200, then stop would be around 1 Point, or $49 (you may want to include cost of commissions and slippage...maybe add .10 or so).
for the $25 stock, if you trade the 400 shares, and Max Dollar Risk is $200, then stop would be $24.50 (again, maybe add for slippage/commissions).
My question is; can you tell me how he arrived at the stop of 1 point, or $49 for the $50 stock and a stop of $24.50 for the $25 dollar stock?
Much appreciated
Carlton
An esignal member by the username of michaelm helped be work out an stop-loss system but I'm still a little confused. I wonder if someone could figure out how he arrived at the figures. Anyway this is what he said:
Determine Stop-Loss Point (from initial entry):
(this is more tricky, and you may want to read more from Lukeman's book about how he determines initial stop loss, but in general...)
for the $50 stock, if you trade the 200 shares, and your Max Dollar Risk is $200, then stop would be around 1 Point, or $49 (you may want to include cost of commissions and slippage...maybe add .10 or so).
for the $25 stock, if you trade the 400 shares, and Max Dollar Risk is $200, then stop would be $24.50 (again, maybe add for slippage/commissions).
My question is; can you tell me how he arrived at the stop of 1 point, or $49 for the $50 stock and a stop of $24.50 for the $25 dollar stock?
Much appreciated
Carlton
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