Week In Review 12-14-07
That was one mess of a week and I'm glad I got out on Monday. I'd have to say it was one of the better decisions I've made in the last six months. For the week the portfolio was up 6.5%.
I was a bit shaky on my decision to stay in cash because there were a few indicators that I thought showed that we could be at the beginning of a bull run for a bit. Those indicators have all turned the other direction, so I'll be staying in cash next week as well. That's swell. I'll have to admit on days like today I kind of delight in the market sucking.
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11 comments:
Hello Sir!
I read from a post in April (just found your site and I'm back reading) that you risk no more than 2% on any one trade. Do you mean 2% of your account when purchasing (i.e. $2000 max if you have 100k account) or 2% based on a mental or mathematical risk/stop you would have on the trade (i.e. invest a larger amount on a stock but accept only losing 2% on the purchase - say $2000 if you invested $10,000?)
Thank you
realized I made a mistake a moment ago...on a $10,000 investment you would only risk losing $200 based on a 2% risk)
I'm just thinking that if I'm only willing to risk 2% of my whole portfolio on the purchase price I'm only buying $2000 worth of stock on any one price.
Thanks again
Are you still paper trading the Zweig stocks top 5 RiskGrades? The last post I saw on it was in May I think? Also, when you say the top 5 for this are you saying the 5 with the highest scores (i.e. 400) or with the lowest scores (which would represent less risk I believe?)
I'd love to know more about how you do your screens! :-)
Anonymous #1,
I risk 2% of my total account by letting a trade go south only so much. So for a $100,000 portfolio I would by $10,000 worth of stock and risk $2,000 at most by placing a 20% stop loss on the stock. The possibility always exists that the stop will get blown through, but it doesn't happen very often.
Anonymous #2,
I quit following the RiskGrades rating in November. It was lagging behind my other screens by 50%. So I figured it wasn't worth my time to keep tracking it.
perhaps I should use a nickname since I am both anon 1 and anon 2! sorry about that!
Thanks for the clarification on the risk.
Because of your use of Zweig I'm looking at your archives. I remember when I first got AAII it was because of that screen, but I never made much use of it once I got Stock Investor Pro. For some reason it left me confused as to what to do with it. You, however have really run with it. Have you gone over how you set up your portfolio? I get the impression you are allocating a percentage to each of your three ideas (Zweig and RS/ Zweig and Zack/ and The Moon).
I guess I'm just looking for some clarity. Thanks!
I have a very hard time committing to a winning screen because I love the excitement of finding something new (and usually untested). If I HAD to commit I would trade only the top 5 relative strength stocks in the Zweig screen on a weekly basis.
Because I'm a wimp, I spread things out between several screens and ideas (some of which I haven't discussed on this site yet).
I don't divulge my portfolio because I think it's unhelpful to people out there learning on their own.
I'm getting my can kicked this year by the Zweig RS screen anyway, so I wouldn't know why anyone would even want to know how I manage to get beat by a brainless stock screen!
I think you don't give yourself enough credit. You put the RS together with the ZWEIG screen and have come up with a brainless screen that is almost 50% YTD!
You are wise, too, not to divulge your portfolio...I meant how do you allocate it. I wrongfully assumed you were using the three screens you have and split your account over them. But, now I know you do more screening and testing. I know what you mean about the excitement of finding the new!
Thanks for letting me ramble and question you here! :-)
Ok, the ZWEIG RS. Paper trading it to see how it goes...
The screen from AAII had AMED, APH, EGN, ESL, GHM, MOG.A, NOV, UTX, VMI, VSEC.
I check each for RS(14). The highest in order from highest to lowest top 5 are NOV (63.21); APH (61.87); AMED (56.98); EGN (55.52); VMI (53.49).
Am I getting that right? :-)
The RS data I use is the "% Rank Rel Strength 26 weeks". In order this week they are:
GHM 98
NOV 94
VSEC 93
APH 90
AMED 89
The Zweig screen only selected 10 stocks this week. I think I'll go back and see if there are any indicators about market direction given the number of stocks the screen selects. . .
ha, I see that this can be done right in Stock Investor Pro....I did it the hard way and used Scottrade Elite...
Thanks
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