Humbled
I was up 2% at lunch time thinking I was a trading genius. At the close, my portfolio was down .80%. Just a day in the life of a stock trader.
I was hoping things would bust out a little heavier today, and it looked like they would. But something got the market a little spooked. Things seem a bit overbought anyway, so it will good to let things settle down a bit before the next leg up (if that happens).
Posts
6 comments:
GHM is killing me. If you recall my post of two weeks ago I lost 10% on it. This week I lost 11%. I bought it again, as per the RS top 5 and was enjoying it until the past two days. I am using the 2* ATR for my stops. But that stop was met. I will not be buying it again any time soon! I hate when the market moves against me! the past two days I've lost 2.5% of my portfolio on this mess.
Oh well, there's always next week....
I feel your pain have been whipped by GHM. I don't rebuy unless the previous entry point is reached and I check the chart and the RS. GHM is well up from when Zweig screen first picked it... Yesterday was tough on everyone. What ATR are you using by the way? Mine had a stop 17% below the entry price, which is the biggest I've seen to date.
I think the markets are in for a rough ride with high oil and rising consumer credit concerns. Zweig was one of the few screens that I tested that until Jan 08 did not benefit from market timing over the past 10 yrs based on monthly returns.
Hey SC,
Could you give me a synopsis of how to find and use ATR? Your simple question makes me think I'm probably not using it correctly. I used stockcharts to get the ATR on Tuesday . I then went two times that number and subtracted from my entry price. First time I've used it. In the past I would just use a 10% stop on everything.
Thanks
Hi Matt,
I got my ATR from MSN and now it is 4.92 so 2x is 9.84 which is 17% of the price at 57.09, so a stop would be at 47.25. On stockcharts I see an ATR of 4.295 which gives a stop 15% below 57.09 so I'd have set the stop at 48.50.
Most of my stops are between 5-10% below the entry price now, but JADE is 18% below; INXI is 14% below and GHM is 19% below.
I still have to backtest to see whether stops work in such a selective and active screen.
Hey sc,
Ok, do you check the ATR daily? Then do you set the stop for the day based on that? The ATR on Tuesday was much less than that and I used it for the whole week. I figured it would be like the following:
buy the stock
check the ATR
Set the stop based on 2*ATR below my purchase price.
Am I close to doing it right? :-)
I don't check it daily but weekly, so you are on the right track.
There is something to be said for watching if the ATR or Bollinger Band width gets wide that the volatility in the stock may mean its better to reduce position size.
Post a Comment