Go to Jeff Salisbury LWGate Home Page.From: "Rob Miller" <rmiller2@carolina.rr.com>
Subject: Re: [CANSLIM] Intro...
Date: Fri, 29 Mar 2002 08:41:47 -0500
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This is a multi-part message in MIME format. - ------=_NextPart_000_000E_01C1D6FD.8FDE1210 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Welcome JHS, I have used both methods over the years, but hard stops are all I use = now. While mental stops would sometimes allow me to miss an intraday = move below my stop, more often than not you just get out far below your = mental stop. I also use a risk based money management strategy, and = hard stops allow me to more precisely define my risk. The key is to set = your stop at a point where it is unlikely you will be stopped out, = unless the stock is clearly "broken". WON says that a winning stock = rarely drops more than 8% below a proper buy point, which is in effect = the pivot since he says to buy at or only slightly above the pivot. No = more than 5%. Before I enter a stock, I define my stop by looking at = the chart and deciding that if the stock hits this point then there is = clearly something wrong. If your pivot is $30, a stop of $29.90 is = probably too close, while $28.90 is unlikely if the stock is a winner. = It all depends on the chart. You can often get out sooner if the stock = begins pulling back on heavy volume. I try not to buy more than 8-9% = over my stop because that is where my risk/reward is best. I think of = my initial risk as the cost to buy the position. I'm not willing to = spend 15% to buy a position. I continue to use hard stops even after I = have moved the stop above breakeven (a free position), though my stops = are far enough away that they are unlikely to get hit during a normal = reaction. =20 Also, hard stops are less stressful. If, like me, you take only a few = positions, not knowing your exit can make leaving your computer = difficult. Rob =20 ----- Original Message -----=20 From: jhs=20 To: canslim@xmission.com=20 Sent: Wednesday, March 27, 2002 9:10 PM Subject: [CANSLIM] Intro... I'm another newbie, but have been lurking for sometime observing and = learning. I am not a Forbes referral, but one from a current/long-term = member. This has been a terrific site; it is a rare board that = maintains a sense of dignity as well as being informative. Thanks! I have been investing for several years, but with the assistance of a = broker. I finally decided to pull the plug because I felt I had too = little control. It irritated me no end that we never seemed to come to = some kind of sell rules agreement; hence I rode down more stocks than I = care to admit. I like the discipline of CANSLIM; for now I intend to = follow it pretty much to the letter until I get some more experience and = feel comfortable experimenting a bit. One question: CANLIM dictates a sell when the price drops 8% below = purchase cost (with some variation on the exact percentage). Do most = members write a stop loss order at the same time as the purchase order? = Or do you simply make a mental note and watch the market? I ask this = because I have been told that traders have access to the sell orders and = at times may actually manipulate the prices to the point that they can = dip down and pick off what is then a comparatively cheap stock. - ------=_NextPart_000_000E_01C1D6FD.8FDE1210 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable <!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> <HTML><HEAD> <META http-equiv=3DContent-Type content=3D"text/html; = charset=3Diso-8859-1"> <META content=3D"MSHTML 6.00.2713.1100" name=3DGENERATOR> <STYLE></STYLE> </HEAD> <BODY bgColor=3D#ffffff> <DIV><FONT face=3DArial size=3D2>Welcome JHS,</FONT></DIV> <DIV><FONT face=3DArial size=3D2></FONT> </DIV> <DIV><FONT face=3DArial size=3D2>I have used both methods over the = years, but hard=20 stops are all I use now. While mental stops would sometimes allow = me to=20 miss an intraday move below my stop, more often than not you just=20 get out far below your mental stop. I also use a risk based = money=20 management strategy, and hard stops allow me to more precisely define my = risk. The key is to set your stop at a point where it is = unlikely you=20 will be stopped out, unless the stock is clearly = "broken". WON says=20 that a winning stock rarely drops more than 8% below a proper buy point, = which=20 is in effect the pivot since he says to buy at or only slightly above = the=20 pivot. No more than 5%. Before I enter a stock, I define my = stop by=20 looking at the chart and deciding that if the stock hits this point=20 then there is clearly something wrong. If your pivot is = $30, a=20 stop of $29.90 is probably too close, while $28.90 is unlikely = if the=20 stock is a winner. It all depends on the chart. You can = often=20 get out sooner if the stock begins pulling back on heavy = volume. =20 I try not to buy more than 8-9% over my stop because that = is=20 where my risk/reward is best. I think of my initial risk = as the=20 cost to buy the position. I'm not willing to spend 15% to buy = a=20 position. I continue to use hard stops even after I have = moved the=20 stop above breakeven (a free position), though my stops are far = enough away=20 that they are unlikely to get hit during a normal reaction. =20 </FONT></DIV> <DIV><FONT face=3DArial size=3D2></FONT> </DIV> <DIV><FONT face=3DArial size=3D2>Also, hard stops are less = stressful. If, like=20 me, you take only a few positions, not knowing your exit can make = leaving=20 your computer difficult.</FONT></DIV> <DIV><FONT face=3DArial size=3D2></FONT> </DIV> <DIV><FONT face=3DArial size=3D2>Rob </FONT></DIV> <BLOCKQUOTE dir=3Dltr=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">----- Original Message ----- </DIV> <DIV=20 style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: = black"><B>From:</B>=20 <A title=3Djhs@chorus.net href=3D"mailto:jhs@chorus.net">jhs</A> = </DIV> <DIV style=3D"FONT: 10pt arial"><B>To:</B> <A = title=3Dcanslim@xmission.com=20 href=3D"mailto:canslim@xmission.com">canslim@xmission.com</A> </DIV> <DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Wednesday, March 27, 2002 = 9:10=20 PM</DIV> <DIV style=3D"FONT: 10pt arial"><B>Subject:</B> [CANSLIM] = Intro...</DIV> <DIV><BR></DIV> <DIV><SPAN class=3D00010002-28032002><FONT face=3DArial size=3D2>I'm = another newbie,=20 but have been lurking for sometime observing and learning. I am = not a=20 Forbes referral, but one from a current/long-term member. This = has been=20 a terrific site; it is a rare board that maintains a sense of dignity = as well=20 as being informative. Thanks!</FONT></SPAN></DIV> <DIV><SPAN class=3D00010002-28032002><FONT face=3DArial=20 size=3D2></FONT></SPAN> </DIV> <DIV><SPAN class=3D00010002-28032002><FONT face=3DArial size=3D2>I = have been=20 investing for several years, but with the assistance of a = broker. I=20 finally decided to pull the plug because I felt I had too=20 little control. It irritated me no end that we never seemed = to come=20 to some kind of sell rules agreement; hence I rode down more stocks = than I=20 care to admit. I like the discipline of CANSLIM; for now I = intend to=20 follow it pretty much to the letter until I get some more experience = and feel=20 comfortable experimenting a bit.</FONT></SPAN></DIV> <DIV><SPAN class=3D00010002-28032002><FONT face=3DArial=20 size=3D2></FONT></SPAN> </DIV> <DIV><SPAN class=3D00010002-28032002><FONT face=3DArial size=3D2>One = question: =20 CANLIM dictates a sell when the price drops 8% below purchase cost = (with some=20 variation on the exact percentage). Do most members write a stop = loss=20 order at the same time as the purchase order? Or do you simply = make a=20 mental note and watch the market? I ask this because I have been = told=20 that traders have access to the sell orders and at times may actually=20 manipulate the prices to the point that they can dip down and pick off = what is=20 then a comparatively cheap = stock.</FONT></SPAN></DIV></BLOCKQUOTE></BODY></HTML> - ------=_NextPart_000_000E_01C1D6FD.8FDE1210-- - - - -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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