Go to Jeff Salisbury LWGate Home Page.From: Fanus <fanus13@yahoo.com>
Subject: RE: [CANSLIM] clarification - Reliability
Date: Wed, 12 Dec 2001 21:40:37 -0800 (PST)
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Words of mouth can be a very dangerous thing to take as facts... Stock tips are also word of mouth and look how successful they are... I assume you mean by a WON Breakout, a stock which comply to the CANSLIM criteria and not just ANY breakout. In Market Wizards WON said that over the years about 2/3 (66.67%) of his trades were profitable and 1, or 2 out of 10 were truly great. - - Fanus - --- "Tangen, Eric" <tangene@tycoelectronics.com> wrote: > 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. > === message truncated === __________________________________________________ Do You Yahoo!? Check out Yahoo! Shopping and Yahoo! Auctions for all of your unique holiday gifts! Buy at http://shopping.yahoo.com or bid at http://auctions.yahoo.com - - - -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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