Re: [CANSLIM] clarification


From: "Katherine Malm" <kmalm@earthlink.net>
Subject: Re: [CANSLIM] clarification
Date: Thu, 13 Dec 2001 07:10:42 -0600

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  Norm,

  See my notes in bold.

  In general, he is trying to match the formation to WON's criteria. =
When looking for the C&H pattern, cups had to have handles of at least =
one week to qualify. Handles had to be in upper half, but there were =
some in the study that were marginally in the upper half and included =
anyway. Cups had to be U shaped. No V shapes were included. (Guess he =
doesn't like drinking his coffee from a funnel.) Price has to have risen =
30% before the cup was formed. Cup has to take 7 to 65 weeks to form.=20

  Thanks for relaying the interesting Bulkowski info.  Mr. B definitely =
is on my coffee table list.  I have a 'couple' of questions.

  1) "Cups with higher right lips tend to outperform those with a higher =
left lip."  Why would this be? Who knows? It's a mystery. But the =
differences were statistically significant.

  2) "Failure rate if waited for upside B/O 5%."  Is 'upside B/O' when =
it goes above the left side? B/O occurs when it breaks above the high of =
the handle. Does vol play a roll here? He did not include volume as =
criteria for B/O because removing the criteria hurt performance, but =
only slightly. He does give statistics on volume at breakout and after, =
and the volume tends to be very high. Only 5% failure with these is =
surprising.  And failure is when the price falls back to the pivot? No, =
failure is when the price falls below the pivot and heads down. A =
pullback to the pivot that subsequently moves on is considered a =
"throwback" or pullback, and is not considered a failure.

  This chapter alone is worth the price of the book. The ROI makes this =
investment a big winner.

  Katherine

  Norm

  ----- Original Message -----=20
  From: "Katherine Malm" <kmalm@earthlink.net>
  To: <canslim@lists.xmission.com>
  Sent: Wednesday, December 12, 2001 10:18 PM
  Subject: Re: [CANSLIM] clarification


  > Bulkowski (Encyclopedia of Chart Patterns) gives statistics on C&H =
and cups
  > w/o handles:
  >=20
  > 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%.
  >=20
  > C w/o H (Rounding Bottoms):
  > Failure rate 38%
  > Failure rate if waited for upside B/O 5% =
<<<<---------------<<<<<<<<<
  > Average rise 54%, most likely 20%
  >=20
  > Nothing on flat bases.
  >=20
  > 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
  >=20
  >=20
  > > 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.
  >=20
  >=20
  > -
  > -To subscribe/unsubscribe, email "majordomo@xmission.com"
  > -In the email body, write "subscribe canslim" or
  > -"unsubscribe canslim".  Do not use quotes in your email.
  >=20
  >=20
  >=20

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<BLOCKQUOTE=20
style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; =
BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
  <DIV style=3D"FONT: 10pt arial"><STRONG>Norm,</STRONG></DIV>
  <DIV style=3D"FONT: 10pt arial"><STRONG></STRONG>&nbsp;</DIV>
  <DIV style=3D"FONT: 10pt arial"><STRONG>See my notes in =
bold.</STRONG></DIV>
  <DIV style=3D"FONT: 10pt arial"><STRONG></STRONG>&nbsp;</DIV>
  <DIV style=3D"FONT: 10pt arial"><STRONG>In general, he is trying to =
match the=20
  formation to WON's criteria. When looking for the C&amp;H pattern, =
cups had to=20
  have handles of at least one week to qualify. Handles had to be in =
upper half,=20
  but there were some in the study that were marginally in the upper=20
  half&nbsp;and included anyway. Cups had to be U shaped. No V shapes =
were=20
  included. (Guess he doesn't like drinking his coffee from a funnel.) =
Price has=20
  to have risen 30% before the cup was formed.&nbsp;Cup has to take 7 to =
65=20
  weeks to form.</STRONG> </DIV>
  <DIV style=3D"FONT: 10pt arial">&nbsp;</DIV>
  <DIV>Thanks for relaying the interesting Bulkowski info.&nbsp; Mr. B=20
  definitely is on my&nbsp;coffee table&nbsp;list.&nbsp; I have a =
'couple' of=20
  questions.</DIV>
  <DIV>&nbsp;</DIV>
  <DIV>1) "<FONT color=3D#0000ff>Cups with higher right lips tend to =
outperform=20
  those with a higher left lip."&nbsp; </FONT>Why would this be? =
<STRONG>Who=20
  knows? It's a mystery. But the differences were statistically=20
  significant.</STRONG></DIV>
  <DIV><STRONG></STRONG>&nbsp;</DIV>
  <DIV>2) "<FONT color=3D#0000ff>Failure rate if waited for upside B/O =
5%."&nbsp;=20
  </FONT>Is 'upside B/O' when it goes above the left side? <STRONG>B/O =
occurs=20
  when it breaks above the high of the handle.</STRONG>&nbsp;Does vol =
play a=20
  roll here? <STRONG>He did not include volume as =
criteria&nbsp;for&nbsp;B/O=20
  because&nbsp;removing the criteria hurt =
performance,&nbsp;but&nbsp;only=20
  slightly.</STRONG>&nbsp;<STRONG>He does give statistics on volume at =
breakout=20
  and after, and the volume tends to be very high.</STRONG> Only 5% =
failure with=20
  these is surprising.&nbsp; And failure is when the price falls back to =
the=20
  pivot? <STRONG>No, failure is when the price falls below the pivot and =
heads=20
  down. A pullback to the pivot that subsequently moves on is considered =
a=20
  "throwback" or pullback, and is not considered a =
failure.</STRONG></DIV>
  <DIV><STRONG></STRONG>&nbsp;</DIV>
  <DIV><STRONG>This chapter alone is worth the price of the book. The =
ROI makes=20
  this investment a big winner.</STRONG></DIV>
  <DIV><STRONG></STRONG>&nbsp;</DIV>
  <DIV><STRONG>Katherine</STRONG></DIV>
  <DIV><FONT face=3DArial size=3D2></FONT>&nbsp;</DIV>
  <DIV>Norm<BR></DIV>
  <DIV>----- Original Message -----=20
  <DIV>From: "Katherine Malm" &lt;<A=20
  href=3D"mailto:kmalm@earthlink.net">kmalm@earthlink.net</A>&gt;</DIV>
  <DIV>To: &lt;<A=20
  =
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
&gt;</DIV>
  <DIV>Sent: Wednesday, December 12, 2001 10:18 PM</DIV>
  <DIV>Subject: Re: [CANSLIM] clarification</DIV></DIV>
  <DIV><BR></DIV>&gt; Bulkowski (Encyclopedia of Chart Patterns) gives=20
  statistics on C&amp;H and cups<BR>&gt; w/o handles:<BR>&gt; <BR>&gt;=20
  C&amp;H:<BR>&gt; Failure rate 26%<BR>&gt; Failure rate if waited for =
B/O 10%=20
  =
&lt;&lt;&lt;&lt;--------------&lt;&lt;&lt;&lt;&lt;&lt;&lt;&lt;&lt;<BR>&gt=
;=20
  Average rise 38%, most likely 10-20%<BR>&gt; Cups with higher right =
lips tend=20
  to outperform those with a higher left lip.<BR>&gt; Avg gain 40% vs=20
  35%.<BR>&gt; <BR>&gt; C w/o H (Rounding Bottoms):<BR>&gt; Failure rate =

  38%<BR>&gt; Failure rate if waited for upside B/O 5%=20
  =
&lt;&lt;&lt;&lt;---------------&lt;&lt;&lt;&lt;&lt;&lt;&lt;&lt;&lt;<BR>&g=
t;=20
  Average rise 54%, most likely 20%<BR>&gt; <BR>&gt; Nothing on flat=20
  bases.<BR>&gt; <BR>&gt; Katherine<BR>&gt; ----- Original Message =
- -----<BR>&gt;=20
  From: "Tangen, Eric" &lt;<A=20
  =
href=3D"mailto:tangene@tycoelectronics.com">tangene@tycoelectronics.com</=
A>&gt;<BR>&gt;=20
  To: &lt;<A=20
  =
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
&gt;<BR>&gt;=20
  Sent: Wednesday, December 12, 2001 9:41 PM<BR>&gt; Subject: RE: =
[CANSLIM]=20
  clarification<BR>&gt; <BR>&gt; <BR>&gt; &gt; The 40% number is an =
amalgam of a=20
  number of anecdotes from a few different<BR>&gt; &gt; sources. Its all =
word of=20
  mouth. No names to given protect the guilty.<BR>&gt; &gt;<BR>&gt; &gt; =
You can=20
  almost infer such a number from WON himself...I'd bet if you =
asked<BR>&gt;=20
  &gt; the big-O-man in a seminar he'd deflect the question to point out =
how=20
  much<BR>&gt; &gt; you are ahead having 1 big gain out of 2-5 =
trades.<BR>&gt;=20
  &gt;<BR>&gt; &gt;<BR>&gt; &gt; ERIC TANGEN<BR>&gt; &gt;<BR>&gt; &gt;=20
  -----Original Message-----<BR>&gt; &gt; From: <A=20
  =
href=3D"mailto:camelot.homes@charter.net">camelot.homes@charter.net</A>=20
  [mailto:camelot.homes@charter.net]<BR>&gt; &gt; Sent: Wednesday, =
December 12,=20
  2001 9:16 PM<BR>&gt; &gt; To: <A=20
  =
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
<BR>&gt;=20
  &gt; Subject: Re: [CANSLIM] clarification<BR>&gt; &gt;<BR>&gt; =
&gt;<BR>&gt;=20
  &gt; eric, how do you get the 40% reliability of the WON breakout? =
david=20
  frank<BR>&gt; &gt; ----- Original Message -----<BR>&gt; &gt; From: =
"Tangen,=20
  Eric" &lt;<A=20
  =
href=3D"mailto:tangene@tycoelectronics.com">tangene@tycoelectronics.com</=
A>&gt;<BR>&gt;=20
  &gt; To: &lt;<A=20
  =
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
&gt;<BR>&gt;=20
  &gt; Sent: Wednesday, December 12, 2001 8:57 PM<BR>&gt; &gt; Subject: =
RE:=20
  [CANSLIM] clarification<BR>&gt; &gt;<BR>&gt; &gt;<BR>&gt; &gt; &gt; Of =
course=20
  you are right...risk is the stop value itself...it is what you<BR>&gt; =
&gt;=20
  &gt; loose when your stop is triggered. It is what I mean but didn't=20
  say<BR>&gt; &gt; &gt; correctly.<BR>&gt; &gt; &gt;<BR>&gt; &gt; &gt; =
This is=20
  what happens when I try to communicate math verbally...the two<BR>&gt; =
&gt;=20
  don't<BR>&gt; &gt; &gt; mix. :)<BR>&gt; &gt; &gt;<BR>&gt; &gt; &gt; =
ERIC=20
  TANGEN<BR>&gt; &gt; &gt;<BR>&gt; &gt; &gt;<BR>&gt; &gt; &gt;<BR>&gt; =
&gt; &gt;=20
  -----Original Message-----<BR>&gt; &gt; &gt; From: John Adair=20
  [mailto:xjadair@brightok.net]<BR>&gt; &gt; &gt; Sent: Wednesday, =
December 12,=20
  2001 8:48 PM<BR>&gt; &gt; &gt; To: <A=20
  =
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
<BR>&gt;=20
  &gt; &gt; Subject: RE: [CANSLIM] clarification<BR>&gt; &gt; =
&gt;<BR>&gt; &gt;=20
  &gt;<BR>&gt; &gt; &gt; Hi Erick<BR>&gt; &gt; &gt; If I am reading your =
post=20
  right&nbsp; correctly you would say your risk<BR>&gt; &gt; &gt; on a=20
  $50<BR>&gt; &gt; &gt; stock with a $5.00 stop would be&nbsp; $50.00 =
- -$5.00 or=20
  $45.00. If that is<BR>&gt; what<BR>&gt; &gt; &gt; you are saying&nbsp; =
I would=20
  not agree I would say your risk is $5.00&nbsp; if I<BR>&gt; &gt; &gt;=20
  understand what Tharp suggests. Tharp then limits your risk to&nbsp; =
the=20
  1%<BR>&gt; is<BR>&gt; &gt; &gt; based on that figure 1% ( 3% for the=20
  gunslinger) of your total&nbsp; capitol.<BR>&gt; &gt; &gt; John =
Adair<BR>&gt;=20
  &gt; &gt;<BR>&gt; &gt; &gt; -----Original Message-----<BR>&gt; &gt; =
&gt; From:=20
  <A=20
  =
href=3D"mailto:owner-canslim@lists.xmission.com">owner-canslim@lists.xmis=
sion.com</A><BR>&gt;=20
  &gt; &gt; [mailto:owner-canslim@lists.xmission.com]On Behalf Of =
Tangen,=20
  Eric<BR>&gt; &gt; &gt; Sent: Wednesday, December 12, 2001 7:19 =
PM<BR>&gt; &gt;=20
  &gt; To: <A=20
  =
href=3D"mailto:'canslim@lists.xmission.com'">'canslim@lists.xmission.com'=
</A><BR>&gt;=20
  &gt; &gt; Subject: RE: [CANSLIM] clarification<BR>&gt; &gt; =
&gt;<BR>&gt; &gt;=20
  &gt; The latter....your risk is your buy price less the stop. Rule of=20
  thumb:<BR>&gt; &gt; that<BR>&gt; &gt; &gt; number should be 1% or less =
of your=20
  total trading capital. So if you<BR>&gt; want<BR>&gt; &gt; in<BR>&gt; =
&gt;=20
  &gt; on a more volatile stock, just buy less of it...but don't set the =

  stop<BR>&gt; at<BR>&gt; &gt; &gt; 7-8% if the stock has a 10% daily =
trading=20
  range - another point HTMMIS<BR>&gt; &gt; &gt; doesn't =
address.<BR>&gt; &gt;=20
  &gt;<BR>&gt; &gt; &gt; Trading any system with a 7-8% risk for each =
trade is a=20
  receipe for<BR>&gt; &gt; &gt; disaster. The pros use a 1% limit. If =
(as in=20
  HTMMIS suggest) you split<BR>&gt; up<BR>&gt; &gt; &gt; your capital =
evenly=20
  amoung 5-6 stocks and used an arbitrary 7-8% stop<BR>&gt; &gt; =
loss,<BR>&gt;=20
  &gt; &gt; statistically, it would be very easy to get enough losing =
trades=20
  to<BR>&gt; loose<BR>&gt; &gt; &gt; all your money. The unspoken 40%=20
  reliability of the WON breakouts only<BR>&gt; &gt; makes<BR>&gt; &gt; =
&gt;=20
  this bad situation worse.<BR>&gt; &gt; &gt;<BR>&gt; &gt; &gt; I'm =
afraid that=20
  a quick reading of HTMMIS gives the impression that if<BR>&gt; =
you<BR>&gt;=20
  &gt; &gt; can identify the perfect C+H setup and all the other CANSLIM =

  criteria<BR>&gt; are<BR>&gt; &gt; in<BR>&gt; &gt; &gt; place, you can =
get darn=20
  near 100% reliability of a breakout. I have a<BR>&gt; big<BR>&gt; &gt; =
&gt;=20
  problem with that.<BR>&gt; &gt; &gt;<BR>&gt; &gt; &gt; I'm not down on =

  CANSLIM...just like people to know the reality of the<BR>&gt; &gt; =
&gt;=20
  situation. Your going for home runs here and home run hitters have a=20
  lot<BR>&gt; &gt; of<BR>&gt; &gt; &gt; strikeouts.<BR>&gt; &gt; =
&gt;<BR>&gt;=20
  &gt; &gt;<BR>&gt; &gt; &gt; ERIC TANGEN<BR>&gt; &gt; &gt;<BR>&gt; &gt; =
&gt;=20
  -----Original Message-----<BR>&gt; &gt; &gt; From: Katherine Malm=20
  [mailto:kmalm@earthlink.net]<BR>&gt; &gt; &gt; Sent: Wednesday, =
December 12,=20
  2001 2:02 PM<BR>&gt; &gt; &gt; To: <A=20
  =
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
<BR>&gt;=20
  &gt; &gt; Subject: Re: [CANSLIM] clarification<BR>&gt; &gt; =
&gt;<BR>&gt; &gt;=20
  &gt;<BR>&gt; &gt; &gt; &gt;&gt;If you put 7-8% of your trading =
capital<BR>&gt;=20
  &gt; &gt; &gt; at risk on any one trade<BR>&gt; &gt; &gt;<BR>&gt; &gt; =
&gt;=20
  Now that I've been mulling over your comment, it begs another=20
  question.<BR>&gt; &gt; Are<BR>&gt; &gt; &gt; you suggesting the =
*total* monies=20
  invested in a trade are "at risk"? Or<BR>&gt; &gt; the<BR>&gt; &gt; =
&gt;=20
  amount which you've specified in downside stop-loss protection as =
"at<BR>&gt;=20
  &gt; &gt; risk."?<BR>&gt; &gt; &gt;<BR>&gt; &gt; &gt; =
Katherine<BR>&gt; &gt;=20
  &gt;<BR>&gt; &gt; &gt;<BR>&gt; &gt; &gt; ----- Original Message =
- -----<BR>&gt;=20
  &gt; &gt; From: "Tangen, Eric" &lt;<A=20
  =
href=3D"mailto:tangene@tycoelectronics.com">tangene@tycoelectronics.com</=
A>&gt;<BR>&gt;=20
  &gt; &gt; To: &lt;<A=20
  =
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
&gt;<BR>&gt;=20
  &gt; &gt; Sent: Wednesday, December 12, 2001 1:46 PM<BR>&gt; &gt; &gt; =

  Subject: RE: [CANSLIM] clarification<BR>&gt; &gt; &gt;<BR>&gt; &gt;=20
  &gt;<BR>&gt; &gt; &gt; &gt; Welcome to the club! Breakouts are a high =
risk and=20
  high reward<BR>&gt; &gt; strategy -<BR>&gt; &gt; &gt; if<BR>&gt; &gt; =
&gt;=20
  &gt; you're batting .500, that's pretty darn good. You should expect=20
  40%<BR>&gt; &gt; &gt; success<BR>&gt; &gt; &gt; &gt; at finding =
successful=20
  breakouts long-term.<BR>&gt; &gt; &gt; &gt;<BR>&gt; &gt; &gt; &gt; I =
just have=20
  to get this off my chest for the new subscribers...WON's<BR>&gt; &gt;=20
  7-8%<BR>&gt; &gt; &gt; &gt; stop below the pivot is a technical stop. =
It is a=20
  rule of thumb based<BR>&gt; on<BR>&gt; &gt; &gt; &gt; volatility in =
the handle=20
  region before a stock takes off.<BR>&gt; &gt; &gt; &gt;<BR>&gt; &gt; =
&gt; &gt;=20
  It is NOT A MONEY MANAGEMENT STOP!. If you put 7-8% of your =
trading<BR>&gt;=20
  &gt; &gt; capital<BR>&gt; &gt; &gt; &gt; at risk on any one trade, you =
will=20
  eventually pay some really serious<BR>&gt; &gt; Wall<BR>&gt; &gt; &gt; =
&gt;=20
  Street tuition on the path to becoming successful trader.<BR>&gt; &gt; =
&gt;=20
  &gt;<BR>&gt; &gt; &gt; &gt; WON's work has virtually nothing in the =
area of=20
  money management (what<BR>&gt; &gt; he<BR>&gt; &gt; &gt; &gt; does say =
is just=20
  plain outdated...by 5 stocks with 100k...more<BR>&gt; &gt; =
appropriate<BR>&gt;=20
  &gt; &gt; &gt; to an era of high commissions and lower =
volatility).<BR>&gt;=20
  &gt; &gt; &gt;<BR>&gt; &gt; &gt; &gt; Tharp's books are the best =
(only?) work=20
  in this area and should be<BR>&gt; &gt; &gt; required<BR>&gt; &gt; =
&gt; &gt;=20
  reading before you head out to the great casino that is Wall =
Street.<BR>&gt;=20
  &gt; &gt; &gt;<BR>&gt; &gt; &gt; &gt; ERIC TANGEN<BR>&gt; &gt; =
&gt;<BR>&gt;=20
  &gt; &gt;<BR>&gt; &gt; &gt;<BR>&gt; &gt; &gt; -<BR>&gt; &gt; &gt; -To=20
  subscribe/unsubscribe, email "<A=20
  =
href=3D"mailto:majordomo@xmission.com">majordomo@xmission.com</A>"<BR>&gt=
; &gt;=20
  &gt; -In the email body, write "subscribe canslim" or<BR>&gt; &gt; =
&gt;=20
  -"unsubscribe canslim".&nbsp; Do not use quotes in your email.<BR>&gt; =
&gt;=20
  &gt;<BR>&gt; &gt; &gt; -<BR>&gt; &gt; &gt; -To subscribe/unsubscribe, =
email=20
  "<A =
href=3D"mailto:majordomo@xmission.com">majordomo@xmission.com</A>"<BR>&gt=
;=20
  &gt; &gt; -In the email body, write "subscribe canslim" or<BR>&gt; =
&gt; &gt;=20
  -"unsubscribe canslim".&nbsp; Do not use quotes in your email.<BR>&gt; =
&gt;=20
  &gt;<BR>&gt; &gt; &gt;<BR>&gt; &gt; &gt; -<BR>&gt; &gt; &gt; -To=20
  subscribe/unsubscribe, email "<A=20
  =
href=3D"mailto:majordomo@xmission.com">majordomo@xmission.com</A>"<BR>&gt=
; &gt;=20
  &gt; -In the email body, write "subscribe canslim" or<BR>&gt; &gt; =
&gt;=20
  -"unsubscribe canslim".&nbsp; Do not use quotes in your email.<BR>&gt; =
&gt;=20
  &gt;<BR>&gt; &gt; &gt; -<BR>&gt; &gt; &gt; -To subscribe/unsubscribe, =
email=20
  "<A =
href=3D"mailto:majordomo@xmission.com">majordomo@xmission.com</A>"<BR>&gt=
;=20
  &gt; &gt; -In the email body, write "subscribe canslim" or<BR>&gt; =
&gt; &gt;=20
  -"unsubscribe canslim".&nbsp; Do not use quotes in your email.<BR>&gt; =

  &gt;<BR>&gt; &gt;<BR>&gt; &gt; -<BR>&gt; &gt; -To =
subscribe/unsubscribe, email=20
  "<A =
href=3D"mailto:majordomo@xmission.com">majordomo@xmission.com</A>"<BR>&gt=
;=20
  &gt; -In the email body, write "subscribe canslim" or<BR>&gt; &gt;=20
  -"unsubscribe canslim".&nbsp; Do not use quotes in your email.<BR>&gt; =

  &gt;<BR>&gt; &gt; -<BR>&gt; &gt; -To subscribe/unsubscribe, email "<A=20
  =
href=3D"mailto:majordomo@xmission.com">majordomo@xmission.com</A>"<BR>&gt=
; &gt;=20
  -In the email body, write "subscribe canslim" or<BR>&gt; &gt; =
- -"unsubscribe=20
  canslim".&nbsp; Do not use quotes in your email.<BR>&gt; <BR>&gt; =
<BR>&gt;=20
  -<BR>&gt; -To subscribe/unsubscribe, email "<A=20
  =
href=3D"mailto:majordomo@xmission.com">majordomo@xmission.com</A>"<BR>&gt=
; -In=20
  the email body, write "subscribe canslim" or<BR>&gt; -"unsubscribe=20
  canslim".&nbsp; Do not use quotes in your email.<BR>&gt; <BR>&gt; =
<BR>&gt;=20
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