Yeah stop losses don't work because of all the smart computers & people watching and preying on you. Stop losses on warrants don't work either because the spread can move way past your price, and then trigger as a trade goes through with someone else bailing or a bottom picker. That is why I asked for a SMS service to track the spread - Simon??
Simon sez it true. Even a buy-and-hold needs a stop. Would you be wanting to hold Agl at 550 now? How many trades are you going to miss becaws your cash is tied up in a bad position? As for quick trades with geared instruments - stops are vital. If you don't have them, sooner or later, the market WILL take you owt.
Simon - there is a big difference between a collapsing industry, and the companies like GM associated therto,and the short lived erratic price dips of generally solid company's ,caused by short selling. What I'm suggesting is that you look at ways of smoothing out those occurences,by offering the option of an alternative stop loss statergy,based on volumes traded and/or a moving price average correlation over a time frame. This way you'll give stock holders a choice - an instant stop loss for the panicky holders and more balanced, circumspect option (smoothing out the irregular price declines) for the steadfast long term investors.
What i find works quite well is the Elder safe stop zone(from Come into my trading room) a system he developed to put stops (long or short) away from the noise. Only started using at the beginning of the year and so far its worked quite well worth a try if you unsure where to put stops.
Thx for all the valuable contributions thus far to my rather innocent posting. Still learning all the time - like NOT to buy anything on a Friday afternoon and NOT to back all SA Super 14 teams Down plenty - without stop losses this time. Hope to still be around by next week!
You can only tell 'erratic' movements after the fact. What you are talking about, is holding through a loss in the hope that it will come back, becaws, erm, its a good company. Fact is, bad stuff happens to good companies all the time. Often they do come back but unless you are God, you can't tell whether a company is having a bad day, or is on a long road down. And that's what will wipe you out.