What Happened????

[Karel]

It is a personal decision...I was a pretty strict Canslimmer from the 70's till 2000 although I basically used 10%...But it 2000 I found that I was getting shaken out a lot. Maybe I was buying at the wrong time or maybe Canslim doesn't take into account the increased volatility that started occurring in the 90's.I'd say you have to try and determine why a stock went down. That's pretty tough though.In my dt's I rarely lose more than 2%...Of course I raely make more than 4% on dt's...Doug

I would like to chime in here: yes, it is a personal decision, and one that should be based on your style of trading/investing. Here is Doug, with his 2% "stop" for his daytrades. In "Five Minute Investing", you aim for multibangers, and its inventor advises a 33% stop. Fundamental investors won't use a stop at all, or not a price action stop. Their "stops" would be a change in the fundamentals.

Regards,

Karel

[Runner]

No prob...We've known each other quite a while...Even before we were here at Mr. M...I think you are a very good guy...And I will say that you have come a long way and you have learned a lot more about some things about the market than I will ever hope to know...I certainly respect you for that.But there is probably a little more to my frustration...And this probably has some bearing on my attitude...In fact, I know it does...I have lost a heck of a lot of money these past 3 weeks...I normally present myself on the Net as having Nerves of Steel...And normally I do...And to be honest...I am not worried about my own situation...But I am ticked off at myself for my 3 longer term holdings...WITS, ICOC, ABAX...I think I was taking my own frustration out on others...So I sincerely do apologize to you and the others I may have offended.I have been thru major losses in the past...I'll get it back...I know that...But maybe I only have nerves of Aluminum...Thanks...Doug(IIC)

Doug, I can understand the frustration and sorry to hear about your long-term holdings. I figured out a simple method I use and I’m sure you’ve seen it or heard about it. I’ll post this link. http://geoshorttermtrading.blogspot..../atr-stop.html I use this method and you can fix your hard stops with it. Normally if you have a ATR X2 against your position you probably do not want to be in that position. This simple method also sizes your positions so that your not gun slinging. Not sure this will help anyone, as I know we all have different methods or techniques if you will. This method will also work for longer-term investors.

I do not claim that this is fool proof and you will get your share of stop outs. Just like any method. What I do like about it is your setting up a volatility portfolio with position sizing based off that volatility. Each day or week the stock moves in your favor you simply readjust the stop based off the ATR. You know the risk before you pull the trigger. Sure some will have a real nice cushion and many would think, “Wow no way I’m risking 8-9% on any trade”. What they fail to understand the risk is the same based off the number of shares bought. Enough already just trying to help.

[Karel]

Hi Runner,

I like the idea of ATR stops, but did you really read that article? The stop calculated is -2.96, and the current price is 49.23. That is a 6% stop. Doug was talking about long term holdings. In the world of 6% stops, long term holdings just don't exist, and the other way around. ATR stops and stops in general are nice if you want to catch a run-up. It is just a matter of choice.

If you use tight stops (and ATR stops generally are tight), you accept small losses, because you know the number and average gain of your wins more than compensates.

If you use wide (and I mean really wide, 20% or more), or no stops, you accept temporary losses because you are convinced that your stocks in general more than compensate.

My total portfolio value dropped 15% over the last three weeks. I am with Doug, that doesn't give me a warm fuzzy feeling. Yesterday, I gained back 3.7%. And I am talking about my total stock portfolio, not the stock I might have bought yesterday, or the day before.

Stops used wisely can be a very good idea, but not always.

Regards,

Karel

[Lyehopper]

Nerves of steel ain't "all that"....

...But maybe I only have nerves of Aluminum...

What alloy Aluminum?....

Maybe your nerves are actually better than you think.... and with another (non-ferrous) alloy spec change you can further improve them.... Perhaps ol Lyehopper can share some of his metallurgical background with you and help you to see things from a different perspective.

I have nerves of aluminum-bronze.... Ampcoloy 45 aluminum-bronze to be exact.

I have found that the market is steel.... You don't want to go up against a market of steel with nerves of steel. Your nerves will fail. As steel nerves rub against the market they will gauld as the heat from friction (caused by these similar materials) builds. The market will eventially wear steel nerves thinner and thinner till they are worn down to nothing. Mere nerves of steel will never stand a chance against the market.... They will always fail.

Your nerves must be a dissimilar material.... yet very wear resistant. Ampco 45 aluminum-bronze is where it's at for your ideal nerve material dude....

[IIC]

What alloy Aluminum?....

Maybe your nerves are actually better than you think.... and with another (non-ferrous) alloy spec change you can further improve them.... Perhaps ol Lyehopper can share some of his metallurgical background with you and help you to see things from a different perspective.

I have nerves of aluminum-bronze.... Ampcoloy 45 aluminum-bronze to be exact.

I have found that the market is steel.... You don't want to go up against a market of steel with nerves of steel. Your nerves will fail. As steel nerves rub against the market they will gauld as the heat from friction (caused by these similar materials) builds. The market will eventially wear steel nerves thinner and thinner till they are worn down to nothing. Mere nerves of steel will never stand a chance against the market.... They will always fail.

Your nerves must be a dissimilar material.... yet very wear resistant. Ampco 45 aluminum-bronze is where it's at for your ideal nerve material dude....

Geez Lye...It's just a figure of speech...But thx for the Metallurgy Refresher Course...I think I was absent the day we covered Ampco 45...Doug(IIC)

[billyjoe]

Lye,
My new knee is chromoly by Stryker. I've also got stainless steel in there from '71 . The doctor says that titanium eventually turns black and can emit some nasty stuff into the bloodstream after a few years. Chromoly is similar to what bearings are made of and nothing toxic has been found to come from it.

billyjoe