Graduate Students Placement

Therefore, they begin to buy and prices will move higher. You will want to be in on the long side of such a move because frequently such "surprise" rallies after lower opening price gaps tend to accentuate upside movement. Once you are long the market, at least two decisions need to be made.

The first decision is where to put your stop loss. As you know, I have stressed the use of stop losses repeatedly and stress it here once again. Initially, your stop loss may be placed several ticks (most often two ticks) below the low of the day at the time that your buy order was filled.

Therefore, if the low of the day was 399 and your buy stop was filled at 401.10, your stop loss would be placed two ticks below 399, or in this case, 398.90. Another procedure for stop losses is based strictly on risk management. In other words, a dollar amount stop will be used regardless of the low of the day.

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