I recently went to the 8% loss sell rule and, lo and behold, within 10 days all of the sold stocks were above the sell point. Am I the only one ?
Todays' Investors Corner deals w/ this subject today. Try this linkhttp://www.investors.com/editorial/corner.asp?v=4/4I just gave it a quick read and will have to read it again.Seems to me you are going to have to put up w/ the whiplash or get out of the market until it settles down. OR bend the rule and allow a little more volatility.Bruce
Corvette,The markets are experiencing a great deal of chop, crap, and general chaos. The 8% rule did it's job correctly. That's the breaks of the game.You may want to just back off for a few months and wait until there is some clear direction in the overall markets. People are still way too confused and panicky, and trying to force the issue will just result in getting whipped out of your positions repeatedly. Currently, the only individual stocks I own are a little SUNW and a little SPLS. The SUNW was purchased because there is a pretty strong bottom in place, and I plan to ride out the storm unless something really decisive happens to prove me wrong. SPLS was purchased as a short term trade, and I'm using a moving-average stop on that. Hope that helps. Z1
I have TRADITIONALLY BEEN a long term buy and hold investor. (Guess ins some respects I still am.) I have been a lurker here for several months. I've read How to Make Money in Stocks and Charting the Market "The Wycoff Method several times each.Long Term Buy and hold's (already in place before research) and still holding/adding monthly in my Portfolio are Mutual FundsOAKLXMFOCXTWGGXVWPVXStocks (LTBH)WMT, KO, PFE, C, WM, CSCO, ORCL (worst performing holding at -50.02 %, SUNW, GTSI (best performing up 92%), RFMD, ET, NTAP, EFCX, EMC, BR, RNWK, JDSU, AOL, CPN, CAH. Looking to add BA and XOM.I have recently began using IBD and started doing some trading in one of my accounts using above methodologies. Recent additions based off of Oneil/IBD concepts AND/OR Wycoff Method charting are:PETMBYDMWYPPDPPEGOLDStrictly risk and off the wall ADSX (I like the story).I am not sure what the right mixture is and I don't think anyone else knows either. There isn't a special cantation with chicken bones and red rice that makes the portfolio work. At this stage of the markets I'm willing to try almost anything. I may be ready to change methods based off how I do with these trades. I am sticking hardcore to the 8 Percent loss on new purchases. Pirate
within 10 days all of the sold stocks were above the sell point. Am I the only one ?Within 10 days? How about within 10 minutes. It's happened to me and it's very frustrating. But you can't lament everytime your stock bounces back from where you got stopped out. No system that utilizes stops is immune from whipsaws, it comes with the territory. You have to just live with it if you're to trade successfully or you'll just drive yourself nuts with wouldas/couldas/shouldas.Breakouts are failing big time but some will bounce back without you onboard. Some recent failures include ZRAN, DFXI & VRST. All have had strong looking breakouts and all have failed spectacularly. Hey, it may even be some manipulation on the part of some big players looking to get out of a large position. Bid one of these smaller stocks into a breakout and than dump their whole position into the CANSLIMers who come out of the woodwork to buy the BO and leave them holding the bag. Some will undoubtedly move to higher ground after this is over and all the stops have been run. But others will also continue to plummet, especially if the bear resumes in earnest.In climates like this it pays to really tighten up on stops. If you have ANY kind of profit, lock it in. I had VRST on its BO and within the first 24 hours had a 10% gain. In that case it's time to lock in a gain and raise your stop. In this case I raised my stop to break even and the next day it plunged 25%. Got filled a bit below my stop, but the tiny loss was managable. This is what I've been doing in this choppy market. Sometimes turns the intermediate length style of CANSLM into day trading, but you have to adapt to what the market gives you. Of course, you can also argue that M isn't in your favor at all and you should be refraining all together from buying BOs.Also, it's easy to remember those stocks that whipsawed you bad. You sometimes forget about those times when you took the 8% loss and it was the best move you could have made. Look at this chart (the weekly one, 2nd down):http://stockcharts.com/webcgi/gall.exe?gall.web+robvThis is a stock that broke out in July '00 during that initial rebound rally following the slide from the Naz' top. Where it's marked 21.44 on the far left of the weekly chart is the BO I'm talking about. It failed the next week--and miserably so. You would have been sitting on 50% loss had you held on for just a few weeks and any longer would have put you even deeper in the hole. There are numerous examples like this during this bear market.8% is designed to keep your capital intact. If you're only investing in 5-6 stocks, 8% on one position is around 1.5% of your port. This is a very recoverable loss. But if you sit and wait just "knowing" your stock will come back you may find yourself sitting on a 15-20% loss or more in no time from a stock that may never come back. Taking a 50% loss on a ROBV waiting for that bounce would take 10% of your total port from just one stock. Bite the bullet, take the 8%, and move on.Ed
<<Bid one of these smaller stocks into a breakout and than dump their whole position into the CANSLIMers who come out of the woodwork to buy the BO and leave them holding the bag>>Or avoid breakouts like the plague and buy the retracements.--Db
Or avoid breakouts like the plague and buy the retracements.If I may quote Wyckoff, he said that any action in the market is only a potential until it is confirmed.V.
Many thanks to all that responded to the 8% sell rule. Very helpful.
Not that it really matters other than I feel better about it...Since sticking to more of CANSLIM type investing values my portfoio is up 11% in the past month. Probably more lucky picks than anything else and I HAVE STOPPED taking the losses.Pirate.......
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