SNX - The Washington Island Winner

[skiracer]

Thanks for your advice, point well taken. Although I've been listed as a "junior member", I've been trading stocks for 30 years, and do have an understanding of chart patterns. I also have my rules that I trade by.
One is, I don't place tight "protective stops", they will almost always be taken out clipping a couple of % off your gain.
Two, if at any time I get a 10% or more gain overnight, I take it. I'm a short term trader (never more than a week) so I set price goals when I enter the trade, and have the luxury of watching the market almost anytime I want. When I feel a stock has reached a short term high I get out. I will buy SNX back if it dips back to where I last bought it and closes up for that day. Looking at the chart with the big gap up yesterday I feel there's a strong chance some of that gap will be filled (at least to the 26 level) and usually does. The point and figure charts have SNX as having a Double Top Breakout yesterday, with a revised price target of 46.5. So if I don't get back in at the price I want I'll keep it on my watchlist and move on.
Using this strategy has gotten me in and out of FUQI a few times over the last few weeks, with no pain, only gains. Same with BAC from $5.87 on up.
Sure it takes more work but it lets me sleep at night. I usually don't wait for a 7% stop loss to get out, usually around 4 or 5%. Less stressful. And you do have to pay attention to what the overall market is doing. The stocks I buy don't always exist in a vacuum.
Sorry you got stopped out today, at what point will you buy back? I understand what you're saying about position sizing and expectancy(Van Tharp) ,but rather than trying for a 20% gain vs. a 7% loss, I'm mostly looking for a 12 to 15% gain vs. a 4 or 5% loss. I know there's more trading involved and watching your stocks very closely, but like I said it lets me sleep at night. It also allows me to take many days off from trading and being out of the market I have a clear state of mind when I'm away from the computer and TV. And I agree with you when you say these last two have been good to us and most trades don't turn out as good. Good luck to you too. And if I ever had 7 out of ten 7% losses (as in your example) in a row I'd definitely stop trading for a while to analyze what my mistakes were.

to each his own. actually i removed the stop early this morning and am still holding the trade. up over 19 % at the present. i think the stock goes over $30 or more. i know alot of people get trapped and stopped out of their trades by their stops but i like to maximize every opportunity. over the course of time i know very few traders, who are swing trading on a regular basis with two to three or more trades a week, who are averaging 3 to 4 winners out of 10. actually 3 out of 10 is very good but to make it work you must let the winners run out to the max to make up for those seven 7% losers. i wasnt implying having 7 losers in a row but it can and does happen even to the best of us. my max loss point is 7% which will vary sometimes but never more than 7%. when snx goes over $30 or more i'll have maxed out with the trade. like i said to each his own. it sounds like you're doing well so your strategies must be working for you but you should stay open minded about all of this. good luck.

[skiracer]

In at 24.25! Go, SNX!

Regards,

Karel

nice hold and play karel. 18%.

[Karel]

nice hold and play karel. 18%.

Thanks, ski. But I think Ernie had something to do with it, too!

Regards,

Karel

[skiracer]

Thanks, ski. But I think Ernie had something to do with it, too!

Regards,

Karel

no one is discounting the pick. it was a good one. what you do with the trade is another thing altogether. maximizing the opportunity is something completely different. being happy with 10 -15% is up to each individual. getting as much as you can out of any good setup is much different. i thought you pushed the envelope a bit farther. good work. it's similar to understanding the technical aspects of it's chart and holding out for a better entry if the chart shows that possibility.

[mrmarket]

no one is discounting the pick. it was a good one. what you do with the trade is another thing altogether. maximizing the opportunity is something completely different. being happy with 10 -15% is up to each individual. getting as much as you can out of any good setup is much different. i thought you pushed the envelope a bit farther. good work. it's similar to understanding the technical aspects of it's chart and holding out for a better entry if the chart shows that possibility.

I don't know how to read charts and I don't know how to time the market so I don't get involved in things I know I will do poorly.

[skiracer]

I don't know how to read charts and I don't know how to time the market so I don't get involved in things I know I will do poorly.

no one is knocking anyone ernie. it was a great pick. it made me make the play. but my feelings are that everyone should try to broaden their minds and horizons. and if in doing so you fatten your wallet in the process that wouldnt hurt either. the last two were both great picks. i just felt that there is much more to be made if a bit more thought and appreciation were given regarding the technical aspects of the chart and what that will afford you on the entries and exits. but certainly well done regardless. and im now waiting for the next one.

[Karel]

no one is discounting the pick. it was a good one. what you do with the trade is another thing altogether. maximizing the opportunity is something completely different. being happy with 10 -15% is up to each individual. getting as much as you can out of any good setup is much different. i thought you pushed the envelope a bit farther. good work. it's similar to understanding the technical aspects of it's chart and holding out for a better entry if the chart shows that possibility.

I don't know how to read charts and I don't know how to time the market so I don't get involved in things I know I will do poorly.

Same for me! I must disavow all praise for my handling of this trade, as I was only able to make the trade the next day, when I was pleasantly surprised to find it at a discount to $$$Mr. Market$$$'s price.

In my own portfolio, now suffering from a beakdown in my (historical) records, and in my Marketocracy portfolio, I try, for my own picks, to be a bit more ambitious in keeping them longer, when that seems warranted. But I have so little knowledge of charts, and so little time, that market timing is firmly beyond me.

Regards,

Karel

[skiracer]

im still holding at 28.38 / +18%. broaden your horizons, fatten your wallets

[Karel]

im still holding at 28.38 / +18%. broaden your horizons, fatten your wallets

Hi Ski, didn't SNX drop below your stop level of 27.75? How do you handle these things, and how do you adjust the stop?

Regards,

Karel

[rickg777]

Skiracer

Swing traders don't have 3 out of 10 winners?? I don't know who your acquaintances are? Here's an accounting of my trades - not bragging - although I know Mr. Market wouldn't disapprove.
3/17 DNDN +397% (not pure luck, watched it for a year)
3/23 FAS -8%
4/8 FTI - +4%
4/7 BAC +45%
4/24 FAS +16%
5/6 BUCY +10%
5/6 FAS +3%
5/8 BAC -5%
5/18 BAC Even
5/28 ARO +5%
6/2 BLUD +4%
6/5 BAC +6%
6/12 RF +5%
6/12 BAC -7%
6/17 FUQI +12%
7/1 SNX +12.2%
None of these were held more than 1 week. Most were held 3 days or less. These trades are not B.S. Not including DNDN (which is a once in a lifetime) my other trades are up ac cumlatively 102.2% in about 3 months. I'm just trying to show you there is another way to making profitable trades, other than milking a stock for all you can, and tying up your $$. I do enjoy your detailed charts though.
Even though I admit I don't have patience once I'm in a trade, sometimes I'm too quick on the sell trigger, but I do pick my trades very carefully. Some of my trades involve buying with more than 20% of my trading capital, so I have to be very careful. If I have a string of losing trades, I just get out of the market for a while to regain my composure.

How did I know you'd remove the stop? Don't get married to it, there's new stocks breaking out every day . For example if you're still holding ARO it would be dead $$ for the last month, $$ that could be put to better use.
Just my .02 cents.

[skiracer]

Hi Ski, didn't SNX drop below your stop level of 27.75? How do you handle these things, and how do you adjust the stop?

Regards,

Karel

SNX opened this morning at 27.86 which was .11 above my stop from yesterday p.m. at 27.75. i'm usually up around 5 a.m. looking at the overnight markets and the currency (forex) markets to get an idea of which way the wind is going to blow that day. this morning before the opening bell i removed the stop because i was going to be physically watching the open so if i wanted to or had to exit i would be able to. most of the time if i place a stop at or near the previous days closing bell i usually remove it in the a.m. before the opening bell if i am going to be at my screens in the office. if i have to leave the office or wont be in front of the screen at the open i will place a stop or leave the one from the day before in place. my feelings after the earnings report came out were that SNX was going to go past ernies target so i had kind of made my mind up to ride it out. that was the reasoning behind my removing the stop. it got kind of dicey there for a bit in the initial half hour after the open when it dropped to 27.26 and i had my finger on the trigger a couple of times but it held up and recovered on a big down day which showed how strong it is. some of the new guys here havent heard me say this before but i must have said it hundreds of times here. i very seldom make a trade before 10 a.m. because a very high percentage of times those gaps up or down usually come back to around the previous days closing price around 10 a.m. and then do whatever it is that they are going to do. today was a prime example of that with SNX. big gap down at the open only to recover by 10 a.m. and stay above the previous days closing price all day.
when i want to use a stop overnight i usually look for a strong line of support like a moving average line or a fibonacci retracement line that happens to be near the price action at that time of the day or at the close. I'm fortunate because my time is basically my own to do with as i please being in business for myself and having a couple of construction offices that i am in most of the day during market hours. so i can physically watch my screens almost all the time which is a big advantage just being there to see how the action is developing.
there are times when i do get stopped out of a trade and then the stock comes back and goes higher than where i got stopped out at and that is all part of playing the game. my feelings are that when you have a trade going like FUQI and SNX, they are so exceptional that you have to maximize the opportunity. a well thought out strategy with stops and trailing stops placed at the right points can and will protect your gains and insure greater profits. as with anything it takes experience and trial and error to gain the insight and feel for using them to your advantage.
sometimes i come across abit authoritative. i just want to see everyone do well and am not trying to shove anything down anyone's throat. so i hope everyone that reads these posts understand that and takes them for what they are worth.

[mrmarket]

no one is knocking anyone ernie. it was a great pick. it made me make the play. but my feelings are that everyone should try to broaden their minds and horizons. and if in doing so you fatten your wallet in the process that wouldnt hurt either. the last two were both great picks. i just felt that there is much more to be made if a bit more thought and appreciation were given regarding the technical aspects of the chart and what that will afford you on the entries and exits. but certainly well done regardless. and im now waiting for the next one.

I'd love to do it..but I don't know how. It's no different from asking me to play the saxophone (I can't).

[Karel]

Thanks for the explanation, ski. I am currently a bit overextended in my real money portfolio, so I was happy enough to close the deal when people came knocking on my door offering 28.70 for SNX.

Regards,

Karel

[g92069]

Skiracer, I appreciate your input on how to appropriately apply stops to protect and maximaze profits. I have left some money on the table I would have preferred to take with me, based on my lack of know how.

I also am now aware of your 10am theory. With some appropriately placed stops and a bit of hesitation on the trigger finger, I could have finished the day up 18.9% opposed to the 16.4% I sold at.

In any case, I appreciate your efforts to educate the uninformed.

G

[skiracer]

it's best in life to listen and remain open minded to everything. at least then you are in a position to pick and choose what may be a better path. but no one can argue with taking a 16.4% gain off the table. it's always better in your pocket than given back to the markets. stops are great if you understand how to use them and the technical aspects of where to properly place them so it's harder for market makers to take you out which even in the best case scenarios happens sometimes. good luck.