Wednesday, 23 July 2008

Stops Study: How to Set It

Ever wonder how to set a proper stop? It's as much art as science, technical-analysis guru and author Tom Bulkowski reports on his blog at Bulkowski reveals the results of his study of various stop techniques. While he likes to use a combination of stops based on volatility, recent lows and Fibonacci retracement levels (see this page for more on those), he found a good risk-reward scenario comes from placing the stop 2 cents below the low of the past 10 days. It becomes a trailing stop as the price climbs.

TAGS: market timing, Tom Bulkowski, stops, trading system development

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