Week In Review 5-23-2008
Things didn't go any better for me today. One week ago, I was flying high. This week I got kicked in the shins. For the week, my portfolio lost 9%. The market has a way of teaching guys like me painful lessons. The key is to live to fight another day. I know that what I do works over the long run. One week is just a blip. This week was a nasty blip, but a blip nonetheless.
None of my screens suffered like I did. Zweig Relative Strength 5 (down 5.92%) was brought down by GHMs 15% drop--ouch. There is a lot of good discussion on StockPunk this week about using stops and about some of the struggles Zweig screen traders had this week. There are always going to be weeks where the screens blow up on you. Most people who trade don't make money because they quit after a week like this. If you just realize that you've got to experience the bumps and bruises and just stick with the program. Don't over-think things. Just trade your plan and hang in there.
The other screens did relatively well considering the trading environment this week. Zweig MACD lost 1.79%, To the Moon was up 1.45%, and Zweig and Zacks was down 2.01%.
It will be nice to have a break on Monday (its been a long time since I've looked forward to a holiday from the market). Take the long weekend to relax, rethink, and enjoy the freedom we all enjoy to trade our money in the freest market in the world.
Posts
1 comment:
I just finished Zweig's book. I highly recommend it for anyone following the screens, just for the chapter on stops alone. He often set initial stops 15% below his purchase price and then used trailing stops as prices moved up. He would look at charts when setting stops as well, looking for areas of support. He describes it as an art and once a position was one seems to be a major focus of his activity in managing the position.
His "shotgun" approach to screening combined with ranking was very interesting. The AAII screen is their interpretation of his rules, which has been highly successful, but doesn't inform on setting stops. While some would argue that the screen's success speaks for itself, he gives examples of how stops have served him well and some example of being stopped out early.
In his words: "In the long run they enable me to cut my losses to reasonable size and to let my profits run. I can't think of anything more important in managing money."
Post a Comment