RE: [CANSLIM] DFXI again

From: "Duke Miller" <dukemill@tampabay.rr.com>
Subject: RE: [CANSLIM] DFXI again
Date: Fri, 19 Apr 2002 12:19:56 -0400

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Dave:

Quoting from Advanced Seminar Workshop (SEMNOTS.DOC), Page 4:

"2.  Don't put in limits or stops when trading.  If it closes below your
sell point, sell the stock at the market on the open of the following
day; same procedure for buying."

This workshop predates the late 90's chaos, and it's possible the rule
has changed.  

I went through an exercise exactly like yours outlined below, and IF I
had followed this rule instead of hunkering down over my computer all
day long and selling at exactly the right point, I would have (this
year): a) lost maybe a little more on one stock (PECS, on which I got
out of with a huge gain); but b) would still be in DFXI, among about 8
others.  

We're learning.  How many times we gonna say that?  We're learning.

Duke

- -----Original Message-----
From: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com] On Behalf Of Dave Rubin
Sent: Friday, April 19, 2002 11:44 AM
To: canslim@lists.xmission.com
Subject: [CANSLIM] DFXI again


Bought DFXI on 3/28 breakout. Sold for loss on 4/4. Sat back and watched
the stock surge higher, now hitting new highs on volume. Kicking myself
for following CANSLIM rules.

I know WON says this will happen but nevertheless it is discouraging.
It's happened many times to me already. Each time it makes me want to
throw CANSLIM out the window.

I'm trying to ignore my emotions and do a constructive post-mortem. Did
I buy wrong? I don't think so -- it was a nice cup-handle breakout and I
bought within 5% of the pivot. Did I bail too soon? Maybe. I know you're
supposed to cut losses at 8% period. But in this case on 4/4 it dropped
below 8% only intraday, then it surged to recover above the pivot.

In reviewing past similar trades, intraday activity has often been the
cause. Many times a stock will shake out intraday only to recover before
the day is done.

So I wonder, should the 8% sell rule be applied on closing prices only?
In this case, if I waited until the end of trading on 4/4, I'd still be
in DFXI and enjoying the ride.

Or maybe, should you simply ignore the first hour or two of trading
during the day? It seems to me in many cases, early trading is very
volatile and it's probably best to just sit on the sidelines until after
lunch.

- --
Dave


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