kevin.marra
How do you determine stops?   Previous low?   Previous days low?  A % ?

Do the stops move as the stock climbs?

You booked several losses in the 20-25% range over the past 2 yrs.  Why not cap them at 10-15%.  I looked to see if those had gapped down so you had to take the big losses ( i.e. could not have gotten out down 10-15%).  They had not.  
Quote 0 0
AbovetheGreenLine
The Sell Stops are usually determined by the previous low..  Yes, it is normally better to cap the losses at maybe 10- 15%. We have always logged the Closing price on Stops, simply to have a standard Rule. And sometimes it is hard to Sell on Bad News when the Investment is back in the Green Zone and probably going to have another Money Wave Buy soon. Green Line Subscribers have the advantage of getting out early during the day.

Maybe we should stop using the Closing price?  Since the Investments we follow have High Relative Strength, they usually recover some after Bad News and we sometimes hold on. That is a bad practice, but it worked recently on out on DBD  (down 20 %, then out with tiny gain)

Please see the Rules for raising Sell Stops.

We have found that the high R S Investments that have large Corrections down near their Green Lines and the Relative Strength stays Above 80, then they have a good chance of re-testing the previus Highs. (But of course it is less stressful and risky to EXIT and wait to Buy lower).

With the 10-year Bull aging, we don't want to get stuck in a bunch of weak Investments, so your point is well taken, Kevin.
Good trading, and tell your friends!
Quote 0 0
kevin.marra
Thank you for the quick and thorough response. I have always felt that when i buy on an AGL signal that the upward momentum should start immediately ( at least very soon—a day or two). I used to buy Wm O’neil and Mark Minervini breakouts but i found it hard to chase stocks, and you have to sit in front of the screen all day just in case. . Also, i apparently do not have the skills to know a great base from a mediocre one. AGL accomplishes a few things : buying the best stocks in the market, waiting for a pause, getting in earlier than a base breakout, and the stops are closer.

BTW , I looked at your returns since Jan 2018. Had i used a fixed $ amount for each BUY, and bought all of the “closed trades” ( I assume those were only the ones that were “logged”) my returns could have been somewhere between 276% and 312% in 2018, and YTD in 2019 —about 250%. i eliminated stocks under $7 , and foreign names. That is my bias. Also the variance comes from me capping losses at 10 and 15% ( which is what i would do automatically). I thought about compounding the returns but it was too much work since you often have 2-4 names going at a time. i did not want to go through the process of linking one trade to the next when several things were going on at a time. Also, When i tried it for 2019 the numbers got so big that i knew i would never put $300,000 in one idea . (YTD 2019 , the compounded return—just multiplying the returns one after the other in closed trades would have you up 679% . If you assume an initial $50,000 position you can see how quickly the numbers multiply).

So far my returns are not anywhere near these numbers. Why? Because i cherry pick trades, have varied my position sizing incorrectly based on my gut instinct, avoided trades for a while after 2-3 losses in a row. In other words i lacked discipline and could not get out of my own way. Fear of losing is a killer. You cant trade scared. Going through the returns , one after another, for long periods ( 2 yrs) helped to give confidence in the system/ process.

Again, thank you for the thoughtful response , and your hard work and guidance….

BTW, have you thought of going through the IBD 50, eliminating all of the RS names below 85 as a focus list? I did that . There are 28 names w/ RS above 85 ( a few are in the 82-83 range but the composite score is in the 95 range. These can quickly get back to 90 RS). I used 85 b/c they have corrected quite a bit. It would not take much to get them back to 90. Looks like a good watch list…

Best,
Kevin
Quote 0 0
AbovetheGreenLine
Thank you. Most of the IBD 50 are in our database, but many do not do the average 1 mil daily Volume wanted, and are omitted.
Good trading, and tell your friends!
Quote 0 0