COTs Timer: Stops Study: How to Set It

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 ThePatternSite.com. 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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About This Site

I am an active trader and award-winning investigative journalist based in Lac Brome in Quebec's Eastern Townships, just outside Montreal. I have written about investing and business for The Montreal Gazette, Investor's Digest of Canada, Technical Analysis of Stocks & Commodities, Futures & Options Trader, The Financial Post and others. I am not a certified financial advisor and am still refining my COTs Timer system. Please see more disclaimer information below. See my complete profile at the "Intro to COT" link above.

DISCLAIMER

I created this blog to record my personal, subjective observations about the markets, solely for my entertainment and that of interested readers and to foster research. Nothing on this blog should be construed as financial advice or an offer or recommendation to purchase or sell any security. I encourage anyone interested in the markets to do your own homework and/or consult a professional advisor. I am not a certified financial advisor and am still refining my trading system. I reserve the right to modify or stop publishing aspects of my system at any time or to delay updating my tables for whatever reason, or I may not do so in a timely manner. My system has resulted in very large drawdowns in some trades. Past backtested and real-time results are no guarantee of future performance. I will not be liable for any losses or damages of any kind that result from the content of this site. Although I consider the data, calculations and information on this blog to be reliable, I can't make any guarantees and won't be held liable or responsible for anything erroneous on this website. You are solely responsible for implementing safeguards of your data and system when you use this site and its content and links. It is up to the user of this site and content to protect yourself from worms, trojan horses, viruses and the like. I may hold positions in some of the securities mentioned in this blog.