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Investing/Strategies / Mechanical Investing
|Subject: Re: Bear catchers||Date: 2/23/2013 5:07 PM|
|Author: Zeelotes||Number: 241841 of 254113|
I guess we can't answer absolutely, as there may be many strategies
for purchasing and holding under specific circumstances, for which
stop losses do add a lot of value. I don't know 'em, all I can say is
that they aren't the strategies that are used and tested here.
It is certainly true that I have not found any stop-loss approach applied to MI screens that works consistently well. It has not been for lack of time and effort.
Interestingly, I've spent the last year building a new trading system which I've almost completed which has stop-loss as one of the most important aspects of the system. It is a 4.5% stop-loss. The trading system is invested about 10-12% of the time and is in treasuries the rest. The CAGR is around 45-50%.
As you can see, my focus has been on all but eliminating exposure to the market, and when exposed, limiting drawdown as much as absolutely possible. It was a major under-taking, but very much worth the effort.
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