MarketTrak Question/Comment Message


Posted By: Roy   Date: Sat Oct 6, 2007

Title: stops

Message:
  Years ago I started trading the indexes using the Profunds which only have a closing price. With ETFs' your buys and sells are still on the close. Would you carry say, a 2% stop on close only or intraday?
  Roy

Response:
  The trading model assumes that all trades are done at the close. The model also assumes that stops occur at the close based on the closing price. I use a 4 percent trailing stop limit and will sometimes trade intraday if I feel that a losing position may get worse by the end of the day. You may decide to use a smaller stop limit or a larger one based on your risk tolerance.

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