RE: [CANSLIM] DFXI again

From: "Erik_Harris3745" <erik_harris3745@yahoo.com>
Subject: RE: [CANSLIM] DFXI again
Date: Fri, 19 Apr 2002 12:06:45 -0400

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Hi Dave,

Sorry about your frustration.  I think you made a nice buy (I wish I was in
DFXI).  I also have been "tricked" out of a stock only for it to close the
day higher than my 8% stop.  I personally base my stops on closing prices
and I (typically) don't make trades before 10-10:30 am.

Erik

- -----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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