Stops are a good idea with all equities regardless of price. You need to place it just outside of the ATR to minimize getting stopped out. TOS allows you to chart the spread and from this you can determine the trailing ATR. I typically use trailing stop set outside of the trailing 5 day ATR with the stop at market not limit as a limit has a higher chance of not getting filled. I have been stopped out of a few potentially profitable trades while also getting stopped out to minimize a loss which is the key to profitability. Keeping your loss controlled to meet your projected expectancy is critical, otherwise you might s well just go to the casino or better yet just send me your money so that one of us can enjoy it.
Trade with Confidence
Migo1
From: Meuter Gisbert <gismeu@gmail.
To: OptionClub@yahoogro
Sent: Tuesday, July 14, 2009 12:10:05 AM
Subject: Re: [TheOptionClub.
maybe you should as well distinguish between OTM, ATM and ITM spreads?
gis
On Mon, Jul 13, 2009 at 11:51 AM, cguy444 <carmelo5791@ aol.com> wrote:
I believe this came up briefly in the past, but I was hoping we could reiterate this.
Question: "Do you use stops on your spread trades?"
I have been using stops; and I've been stopped out on a couple of positions where it would have been better to have no stop in place as the price reverted back promptly. I took a loss and didn't have to.
Thanks for the input!
Carmelo
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