Go to Jeff Salisbury LWGate Home Page.From: "Katherine Malm" <kmalm@earthlink.net>
Subject: Re: [CANSLIM] clarification
Date: Wed, 12 Dec 2001 22:18:26 -0600
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Bulkowski (Encyclopedia of Chart Patterns) gives statistics on C&H and cups w/o handles: C&H: Failure rate 26% Failure rate if waited for B/O 10% <<<<--------------<<<<<<<<< Average rise 38%, most likely 10-20% Cups with higher right lips tend to outperform those with a higher left lip. Avg gain 40% vs 35%. C w/o H (Rounding Bottoms): Failure rate 38% Failure rate if waited for upside B/O 5% <<<<---------------<<<<<<<<< Average rise 54%, most likely 20% Nothing on flat bases. Katherine - ----- Original Message ----- From: "Tangen, Eric" <tangene@tycoelectronics.com> To: <canslim@lists.xmission.com> Sent: Wednesday, December 12, 2001 9:41 PM Subject: RE: [CANSLIM] clarification > The 40% number is an amalgam of a number of anecdotes from a few different > sources. Its all word of mouth. No names to given protect the guilty. > > You can almost infer such a number from WON himself...I'd bet if you asked > the big-O-man in a seminar he'd deflect the question to point out how much > you are ahead having 1 big gain out of 2-5 trades. > > > ERIC TANGEN > > -----Original Message----- > From: camelot.homes@charter.net [mailto:camelot.homes@charter.net] > Sent: Wednesday, December 12, 2001 9:16 PM > To: canslim@lists.xmission.com > Subject: Re: [CANSLIM] clarification > > > eric, how do you get the 40% reliability of the WON breakout? david frank > ----- Original Message ----- > From: "Tangen, Eric" <tangene@tycoelectronics.com> > To: <canslim@lists.xmission.com> > Sent: Wednesday, December 12, 2001 8:57 PM > Subject: RE: [CANSLIM] clarification > > > > Of course you are right...risk is the stop value itself...it is what you > > loose when your stop is triggered. It is what I mean but didn't say > > correctly. > > > > This is what happens when I try to communicate math verbally...the two > don't > > mix. :) > > > > ERIC TANGEN > > > > > > > > -----Original Message----- > > From: John Adair [mailto:xjadair@brightok.net] > > Sent: Wednesday, December 12, 2001 8:48 PM > > To: canslim@lists.xmission.com > > Subject: RE: [CANSLIM] clarification > > > > > > Hi Erick > > If I am reading your post right correctly you would say your risk > > on a $50 > > stock with a $5.00 stop would be $50.00 -$5.00 or $45.00. If that is what > > you are saying I would not agree I would say your risk is $5.00 if I > > understand what Tharp suggests. Tharp then limits your risk to the 1% is > > based on that figure 1% ( 3% for the gunslinger) of your total capitol. > > John Adair > > > > -----Original Message----- > > From: owner-canslim@lists.xmission.com > > [mailto:owner-canslim@lists.xmission.com]On Behalf Of Tangen, Eric > > Sent: Wednesday, December 12, 2001 7:19 PM > > To: 'canslim@lists.xmission.com' > > Subject: RE: [CANSLIM] clarification > > > > The latter....your risk is your buy price less the stop. Rule of thumb: > that > > number should be 1% or less of your total trading capital. So if you want > in > > on a more volatile stock, just buy less of it...but don't set the stop at > > 7-8% if the stock has a 10% daily trading range - another point HTMMIS > > doesn't address. > > > > Trading any system with a 7-8% risk for each trade is a receipe for > > disaster. The pros use a 1% limit. If (as in HTMMIS suggest) you split up > > your capital evenly amoung 5-6 stocks and used an arbitrary 7-8% stop > loss, > > statistically, it would be very easy to get enough losing trades to loose > > all your money. The unspoken 40% reliability of the WON breakouts only > makes > > this bad situation worse. > > > > I'm afraid that a quick reading of HTMMIS gives the impression that if you > > can identify the perfect C+H setup and all the other CANSLIM criteria are > in > > place, you can get darn near 100% reliability of a breakout. I have a big > > problem with that. > > > > I'm not down on CANSLIM...just like people to know the reality of the > > situation. Your going for home runs here and home run hitters have a lot > of > > strikeouts. > > > > > > ERIC TANGEN > > > > -----Original Message----- > > From: Katherine Malm [mailto:kmalm@earthlink.net] > > Sent: Wednesday, December 12, 2001 2:02 PM > > To: canslim@lists.xmission.com > > Subject: Re: [CANSLIM] clarification > > > > > > >>If you put 7-8% of your trading capital > > > at risk on any one trade > > > > Now that I've been mulling over your comment, it begs another question. > Are > > you suggesting the *total* monies invested in a trade are "at risk"? Or > the > > amount which you've specified in downside stop-loss protection as "at > > risk."? > > > > Katherine > > > > > > ----- Original Message ----- > > From: "Tangen, Eric" <tangene@tycoelectronics.com> > > To: <canslim@lists.xmission.com> > > Sent: Wednesday, December 12, 2001 1:46 PM > > Subject: RE: [CANSLIM] clarification > > > > > > > Welcome to the club! Breakouts are a high risk and high reward > strategy - > > if > > > you're batting .500, that's pretty darn good. You should expect 40% > > success > > > at finding successful breakouts long-term. > > > > > > I just have to get this off my chest for the new subscribers...WON's > 7-8% > > > stop below the pivot is a technical stop. It is a rule of thumb based on > > > volatility in the handle region before a stock takes off. > > > > > > It is NOT A MONEY MANAGEMENT STOP!. If you put 7-8% of your trading > > capital > > > at risk on any one trade, you will eventually pay some really serious > Wall > > > Street tuition on the path to becoming successful trader. > > > > > > WON's work has virtually nothing in the area of money management (what > he > > > does say is just plain outdated...by 5 stocks with 100k...more > appropriate > > > to an era of high commissions and lower volatility). > > > > > > Tharp's books are the best (only?) work in this area and should be > > required > > > reading before you head out to the great casino that is Wall Street. > > > > > > ERIC TANGEN > > > > > > > > - > > -To subscribe/unsubscribe, email "majordomo@xmission.com" > > -In the email body, write "subscribe canslim" or > > -"unsubscribe canslim". Do not use quotes in your email. > > > > - > > -To subscribe/unsubscribe, email "majordomo@xmission.com" > > -In the email body, write "subscribe canslim" or > > -"unsubscribe canslim". Do not use quotes in your email. > > > > > > - > > -To subscribe/unsubscribe, email "majordomo@xmission.com" > > -In the email body, write "subscribe canslim" or > > -"unsubscribe canslim". Do not use quotes in your email. > > > > - > > -To subscribe/unsubscribe, email "majordomo@xmission.com" > > -In the email body, write "subscribe canslim" or > > -"unsubscribe canslim". Do not use quotes in your email. > > > - > -To subscribe/unsubscribe, email "majordomo@xmission.com" > -In the email body, write "subscribe canslim" or > -"unsubscribe canslim". Do not use quotes in your email. > > - > -To subscribe/unsubscribe, email "majordomo@xmission.com" > -In the email body, write "subscribe canslim" or > -"unsubscribe canslim". Do not use quotes in your email. - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email.
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