Closed out positions since I started posting on this forum.
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50% Annual Returns
- Thread starter alphastocks
- Start date
Although I have used this approach successfully without using stops it has come to my attention, from feedback and discussions that many investors are uncomfortable not having stops. I spent most of the weekend coming up with a solution to this dilemma that will not hurt the long term performance. The answer is a generic stop set 10% away from entry initially; it then travels towards the entry price every day to be break even at 20 days. I have done much testing with this and found that it does not have much impact on long term performance, while providing added protection. To illustrate how this works I have attached a graph of BAMM that we entered on 8/29, which shows the stop as the pink dots
When it comes to profit takes a predetermined level to exit a position is not used, but if our indicators signal a stock has run out of steam the position will be exited.
These additions are implemented on a close basis and will not be triggered intraday, so any trade signal in this strategy is still provided after the Bell.
When it comes to profit takes a predetermined level to exit a position is not used, but if our indicators signal a stock has run out of steam the position will be exited.
These additions are implemented on a close basis and will not be triggered intraday, so any trade signal in this strategy is still provided after the Bell.
Attachments
Quote from alphastocks:
The Shorts are much more technical in nature. There are some fundamentals here as well, but probably more like 70% TA. Basically I look for stocks that are highly priced; that has gone parabolic and that is showing signs of the byers stepping away from the punch bowl. I use an advanced chaos based indicator that I run in TradeStation to filter out the stocks.
Alpha,dot be suprised that your shorts are more technical in nature..I just bout William Oneil book,how to make money shorting stocks,and its basically a class in trndline breaks and head and shoulder tops..And this is from Mr Canslim himself!!!
Quote from alphastocks:
Although I have used this approach successfully without using stops it has come to my attention, from feedback and discussions that many investors are uncomfortable not having stops. I spent most of the weekend coming up with a solution to this dilemma that will not hurt the long term performance. The answer is a generic stop set 10% away from entry initially; it then travels towards the entry price every day to be break even at 20 days. I have done much testing with this and found that it does not have much impact on long term performance, while providing added protection. To illustrate how this works I have attached a graph of BAMM that we entered on 8/29, which shows the stop as the pink dots
When it comes to profit takes a predetermined level to exit a position is not used, but if our indicators signal a stock has run out of steam the position will be exited.
Alpha,I understand the emotional concern from people who "nned' to employ stops.I woild urge them to get their hands on a software system that can fully backtest and optimise all types of stops.I think they will be shocked at their findings.
I have not come across many stop methods that increase system returns..In fact I have nnot come across stop loss methods that increase ones "Recovery ratio"(Net profit/max drawdown).
Do not be deceived or comforted by all you have read about stops...Test them first and see if they indeed are worth implementing...For the hell of it,I will run systems/stops in 2001 and 1987...more to come
I tried to come up with a happy compromise for most people. The stops I will now use are far enough away not to impact the long term performance, while reducing risk. It is not something I just pulled out of a hat, it is carefully tested and researched.
Quote from alphastocks:
I tried to come up with a happy compromise for most people. The stops I will now use are far enough away not to impact the long term performance, while reducing risk. It is not something I just pulled out of a hat, it is carefully tested and researched.
have you looked at volatility based stops?
STOCK TO BUY FOR SEP 19, 2006 (AKS)
STOCK TO BUY FOR SEP 19, 2006 (HC)
STOCK TO BUY FOR SEP 19, 2006 (BVF)
STOCK TO BUY FOR SEP 19, 2006 (NFI)
STOCK TO SELL FOR SEP 19 (IIVI) 19.3% RETURN
STOCK TO SELL FOR SEP 19 (TRW) -3.5% RETURN
STOCK TO SELL FOR SEP 19 (HP) -7.7% RETURN
STOCK TO SELL FOR SEP 19 (LDSH) -11% RETURN
STOCK TO BUY FOR SEP 19, 2006 (HC)
STOCK TO BUY FOR SEP 19, 2006 (BVF)
STOCK TO BUY FOR SEP 19, 2006 (NFI)
STOCK TO SELL FOR SEP 19 (IIVI) 19.3% RETURN
STOCK TO SELL FOR SEP 19 (TRW) -3.5% RETURN
STOCK TO SELL FOR SEP 19 (HP) -7.7% RETURN
STOCK TO SELL FOR SEP 19 (LDSH) -11% RETURN