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Tim,
First only 1/4 under is too tight of a stop. Second to avoid exactly
what happened to you, I never set a stop with a broker unless I'm going out
of town and away from a telephone. Floor traders have been know to take
out the stops and then run the price up. Instead, I set a mental stop and
wait for the stock to close below that stop. Then I put in a market order
to sell at the open.
Jim
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> From: Tim Kruzel <TKruzel@xxxxxxxxxxxxxxxx>
> To: MetaStock User Group <metastock-list@xxxxxxxxx>
> Subject: Did I Get Screwed or Did I Just Screw Up?
> Date: Thursday, September 11, 1997 2:57 PM
>
> I would like to describe a trading situation that occurred to me today
> and get some opinions from you "salty and seasoned" traders.
>
> I bought a stock TRDT (OTC) about a month ago at 15. The bid/ask
> was bid:14, ask:15. Naturally I expected an upward breakout. The
> breakout came yesterday. The stock ended the day with a bid/ask of
> bid:16 1/4 ask: 17 1/8. In order to protect against a loss I placed a
> stop loss order at 16 just prior to the market's opening. To my
> surprise, 5 minutes after the market opened I received a
> confirmation call from my broker. My TRDT holding was sold at
> 16 1/8. As of moments ago TRDT has a bid/ask of bid: 17 5/8,
> ask: 17 7/8.
>
> Did I make an error in judgement with respect to where I set my
> stop loss given the wide bid/ask spread, or did I just get the shaft
> from a market maker? Any comments, questions, observations
> welcome. Thanks,
>
> Regards
> Tim
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