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6:11 pm
October 21, 2009
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Jae Jun
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There is a trailing limit but not sure how different it is to a trailing stop. I used a stop loss on EMAG last time and it worked pretty good. But either way, I'll try it out and let you know.
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1:30 pm
October 21, 2009
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compoundinglife
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Hi Jae,
Thanks for the positive feedback on the post. I think the reasoning behind your trailing stop strategy is good. The thing that scares me about it (and maybe my understanding is wrong), especially with stocks like IGOI is the the execution of the sale. In your example above when IGOI hits 1.26 your sell order gets placed. However you have no promise that the market price at the time it gets placed will be 1.26. It could have gone down to a buck. Worse so, if the buyers are gone there could be someone with a standing buy order at 50 cents that ends up being the only buyer. I have seen some really strange bid/ask spreads on thinly traded issues.
If it is possible to do a trailing stop with some sort of limit, I might consider it. I also think its probably fine on heavily traded companies. But honestly I have ever only placed "market buys", "market sells", "limit buy" and "limit sells" so do not really know how all of the other orders work.
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4:33 am
October 20, 2009
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Jae Jun
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Hey Ken,
That's a great article. I wholeheartedly agree that the phone is the least utilized yet can be one of the most powerful. I need to cold call people more often and stop being a wuss.
About trailing stops, this is my idea.
Say I didn't sell IGOI and my intrinsic value target is exactly $1.50. Now I sold pretty close to $1.30 anyways and I didn't mind. But rather than just put a limit sell order, a strategy I am contemplating is to put in a trailing stop or limit that will be triggered 10%-15% below the last trade.
So had I kept IGOI, I would have set up a trailing stop from $1.40 and if it drops to $1.26, it gets sold. Otherwise if it continues on up, I still get to capture the gains but am willing to exit anytime the 10-15% drop is reached.
Not sure if I make sense though..
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5:07 am
October 19, 2009
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compoundinglife
| | Seattle | |
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I had written a post around the time I sold IGOI that I never got around to editing and publishing. I finally did that tonight, you can see it here
. In the post I disclose one other piece of research about IGOI that went into my decision to sell when it got it to $1.30. I did not sell on this bit of information alone, but I weighed it in my decision. I think the company has a lot of potential, but everywhere I looked I could not find a shred of evidence that they were executing properly. Ultimately it kept bringing me back to the point that holding the stock would be a speculation, so on principle I sold it. As for tailing stops, I have never tried it. I avoid any automated trades and always place limit orders even on heavily traded stocks. Here are my thoughts on stops in general, which you should take with a grain of salt since I have never used them: The sell order gets placed after reaching the trigger price/percentage with no promise of what price your sell will get executed. This means you are at the mercy of the market and/or market makers. On thinly traded stocks the risk of getting screwed is much higher. End of the day near close, your sell order is the last one and someone has some really cheap buy order placed, who knows what could happen. No promises that you will be able to buy it back at the same price either if you feel the sell was too cheap and you want to get your position back. I feel like I would rather be asleep at the wheel and miss the market activity rather than be at the mercy of full time traders and market makers. But that is just my opinion :)
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6:51 pm
October 18, 2009
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Jae Jun
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FYI
I sold all of IGOI. My intrinsic value target was $1.50.
The company will have to prove it can make sales and cash instead of just the news now. Since I don't like the industry it is in, I sold and put my money into better places.
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4:20 am
September 28, 2009
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Jae Jun
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Since IGOI is still on the NASDAQ so it should work. I think brokers set a limit to when you can enter a trailing stop. I remember trying to enter a trailing stop that was about 40% above the current price of a stock but it wasn't accepted because it was above the 30% limit.
Will try it out with IGOI though.
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2:32 am
September 28, 2009
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Jupiter
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I always try and use mental stop losses. The stocks I've tried to use a trailing on my brokers never let me do it because it has to have a certain price over like $10 or something. I'm not sure you can use trailing on small pinksheets. Its worth a shot though i guess.
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10:43 pm
September 26, 2009
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Jae Jun
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Post edited 7:44 pm – September 26, 2009 by Jae Jun
So IGOI is now above its net net value and more. Im up about 130% on this position and I'm thinking of selling but also wanting to employ a selling strategy using the trailing stop.
I figure let a winner run and sell when it drops to a certain level. So by using a trailing stop loss of 10% I'm saying, I am ready to sell but I'm also allowing it to run as much as it wants.
Does anyone else do this?
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