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Shashi,
Tell me if I am wrong but to me a 20 day low is the lowest price in the
last 20 days.
Holland
Shashi Aggarwal wrote:
>
> Here is a little quiz. Its mainly for the benefit of less experienced
> traders on this list. Since I devised this quiz myself, its not too
> difficult ;-) By the way, this is how many people trade and make simple
> mistakes.
>
> For purposes of this quiz, we will assume that the last bar (today)
> displayed in a chart is bar 1, the one before that (yesterday's) is bar 2,
> the one before that is bar 3, and so on.
>
> There are 3 traders - A, B and C. They all have day jobs and when they come
> back home from work, they download the latest data and then look at the
> daily charts of their stock holdings on their computers (in Metastock!)
> Based on this, they then go to their brokers' websites and place appropriate
> orders. e.g. based on the chart, they update their sell-stop price daily.
>
> Lets say all 3 have a long position in a particular stock which has been
> climbing steadily. They have only one sell condition - namely, sell when the
> stock makes a 20-day low. This is what they do:
>
> Trader A - he chooses the low price of bar 20 (latest bar is bar 1, one
> before is bar 2...see above) and selects that as his sell-stop
> Trader B - he chooses the low price of bar 19 for his sell-stop
> Trader C - he chooses the low price of bar 18 for his sell-stop
>
> Which trader is right? Remember, the sell condition is "sell when the stock
> makes a 20-day low". Answer tomorrow.
>
> Shashi
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