TYMJR- I agree, novices need to obey their stops no matter what. The goal of the novice is to remain in the game. I on the otherhand am established, and I'm trying to make the most money possible (with the smallest risk). I feel that not using stops actually takes away most of the risk. Most likely, my gut will turn on me before the actual stop point is triggered anyway (which lets me get out while there is liquidity and before everyone who put their stop at that same obvious level tries to exit). This is an important thing to remember, you can exit a few hundred shares at market whenever you want, but it's impossible to dump 10K+ shares unless there are bids, often bids stack up at previous lows. That's why you must dump before the stop is hit. On the other hand, I find that stops are blown VERY frequently on the NYSE. The specialist knows all the order flow. I will almost never buy until the obvious stop is blown. Therefore, if I'm long, I wouldn't stop out at that point then, but rather buy more. Therefore, I think stops are in general stupid. When the reason for the trade goes away, I'm gonna dump my position. In the case of BVSN, the reason for the trade is a very oversold condition. If the stock just baselines, but doesn't bounce in 2 days, then that oversold condition is worked off, and I'm out. If it goes lower, it just gets more oversold (and juicier). Lower prices always are better b/c you get more value. I think the upside in this situation is probably 30-50c, probably at the lower end of that range.... Therefore, I wouldn't probably risk more than 15c or so anyway. I hate situations where I try and scalp pennies. My order entry ability is awful (especially on the nasdaq). But sometimes it's so damn obvious, that I can't help myself, and I have to get in there to make some money.
Shortnfool- I'll take your comments seriously... Please return the favor.... My reason for this trade is that it's a "great new pattern" type of trade. All my trading is done on gut feel. I just feel that it's done going down for a bit. I could be wrong or right, but I've learned to trust my gut. When you've been doing this a while, your gut is normally smarter than your brain. I've learned to just trust a gut feel, b/c it's usually right, and I have the numbers to prove it. My gut says that this stock is a pretty ideal variant of my favorite pattern.
Kensmith- I am using a stop I guess, It's just not a numerical type of stop. Bvsn could shoot up on tues, and after 30c, I can say that I "feel" that someone is "pushing" it higher to sell for instance, and I'll want out immediately, and just put all my stock into one giant soes and fire away a nickle under the bid. It's whenever my gut says this doesn't "feel" right. You are right, if you don't have some stop, you'll get burnt eventually.
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I hope this answers all the questions. It's kinda hard to explain a statement like "stops are for pussies" which is one of my favorite phrases, but I just live by it, cause there are too many times that a specialist will find some way to stop you out at the bottom. If you know what you're looking for, you'll buy from those people who are stopping out.
