Case studies

This case study examines how Sell@Market service works in different situations. You will see real examples of the Adaptive Trailing Stop method that allows an investor to set a limit on the maximum possible loss without setting a limit on the maximum possible gain, and without requiring paying attention to the investment on an ongoing basis.

The bigger the risk or stock volatility is, the bigger is the return on investments for that stock. For example, before you buy some shares of FX Energy, Inc. (see the chart below), you have to know that the stock is risky, it has high volatility.

Let's consider buying FXEN on 07/05/2006. Using the Sell@Market orange stop, which is called mid risk stop, we risk with 15%..20% of our capital and expect a high return. On 01/10/2007 the mid risk stop is reached. We sell the stock right away and get a 30% return, which is very good for the risk we assumed.

FX Energy, Inc. (Public, NASDAQ:FXEN)

However, betting on high risks will not yield high returns all the time. Let's consider buying Meritage Corporation on 05/16/2005. For example, let us sell MTH on 08/12/2005 using the Sell@Market mid risk stop. In this case, we will be very happy not losing the money.

Meritage Corporation (Public, NYSE:MTH)

Sometimes, like in the Anadigics Inc. case, looking on the chart below you will regret selling the stock at its lowest price once you take a look an the chart below.

But keep in mind situations like that of Meritage Corporation. For example, if you do not sell MTH stock in the above case with the hope that the stock will rise again, you will take increasingly higher risks and can eventually lose much more. That means you should use trailing stop and eliminate the guesswork about when to sell.

Anadigics, Inc. (Public, NASDAQ:ANAD)

More cases are coming soon to show you how Sell@Market can help you protect your investments.