Sunday, December 18, 2005

time stops

I've mentioned stop losses and trailing stops before.

there's another type of loss I sometimes use.
this is a time stop.

when a company's stock price goes sideways for a long period of time, its sometimes better to sell it and put that cash to better use.
the opportunity cost of not doing so can add up.

ING properties has not yet reached my stop loss of $1.16, but has been going sideways between $1.17 and $1.18 for 2 weeks now.
I entered this as a long term trade, so am not too concerned, but i wouldnt like it to keep going sideways for another month either.

so if it doesnt trade at $1.19 within 2 weeks, I'll be selling it.
thats my time stop.
the trailing stop at $1.16 remains.

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