The Motley Fool Discussion Boards

Previous Page

Investing/Strategies / Mechanical Investing


Subject:  Re: Bear catchers Date:  2/23/2013  5:07 PM
Author:  Zeelotes Number:  241841 of 271055

Jim wrote:
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.
Copyright 1996-2018 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us