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No. of Recommendations: 5
An excellent exersize. However, I must point out a couple of things, because I was actually buying and selling CREE and RMBS during this period.

My buy on RMBS came intraday on Oct 15th at 10.50. I got stopped out a couple of days later for no gain (minus commissions of course). Even if I had waited until the close and bought at 11.50, my S/L would have been at 10.12 (12 % below the purchase price), so I would have been stopped out during the day on Oct 17th at 10.12 and that would have only been a 12% loss (your chart showed a 17.39% loss). The only way you can have greater than a 12% loss with my system would be if there was a large gap down on the opening (which is possible on rare occasions). I actually did trade RMBS for no gain. The difference here was that I bought intraday before the actual volume was above the ADV, but at a point during the day when the pro rata volume was on track to easily exceed 140% of the ADV. This is an important point, to buy at exactly the right time if possible.

Also, My CREE buy point came on 11/8 at 20.50, where I bought. There is a little disconnect somewhere if your buy signal didn't come until Nov. 15th at 24. So right now I'm up 53% on my CREE, instead of your 30%. I don't know if there are any other discrepancies, but I'll have to go back and look at AMCC. If the loss was really 19.23 %, there must have been a large gap down on the opening on Oct 17th, otherwise the maximum loss would have been 12%.

But you guys are getting the basic idea. The nice thing about this type of system, is that in a bull market, like most of the 90's, it keeps you in when the stocks are rising, but gets you out when they fall. If a stock starts rising again, the system gets you back in.

NukeJohn
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