Re: [CANSLIM] selling rules question

From: "Tom Worley" <stkguru@bellsouth.net>
Subject: Re: [CANSLIM] selling rules question
Date: Wed, 6 Nov 2002 08:46:19 -0500

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Mike, I like to start with the standard max of an 8% stop loss set from my
entry point, so long as that also puts it just under the bottom of the base
line. Once I am up at least 15%, I prefer to then raise my stop loss to a
break even, then if things keep moving up, also move the stop loss to a
trailing 15%. Granted, I tend to usually do this in my head, and usually
works better when I use hard stops.

I rarely sell part of the position for only a 20% gain. I invest for long
term, and rarely without an expectation / goal of at least 100% gain. If I
feel compelled to sell for only a 20% gain, then normally I sell the entire
position. That also keeps the cost of commission from becoming a measurable
factor for me.

- ----- Original Message -----
From: <michael_niemotka@baxter.com>
To: <canslim@lists.xmission.com>
Sent: Monday, November 04, 2002 12:59 PM
Subject: [CANSLIM] selling rules question


All,

I know I have asked similar questions in the past, but not sure if I have
addressed this one:

If you have bought a stock, and watched it rise , say 15-20%, and being
conservative, you have sold 1/2 your position to lock in those profits, for
the other half, do you use a trailing stop (mental or real) to lock in a
minimum profit on the rest, say 5%, or do you allow it to drop as low as
the 7-8% below your original buy point, or maybe just to a break even
point?

The reason I ask is the somewhat confusing statement that WON makes in his
book about never letting a gain turn into a loss. But how much of a gain do
you have to get before you move up the stop loss from 7-8% below buy point
to a break even point, without unnecessarily getting pushed out of a
otherwise good stock that might just be undergoing a normal correction?

Also, assuming that you capital is small, such that the commission fees are
not negligible, do you include the costs of the trades in calculating the
sell prices?

Thanks

Mike

Mike Niemotka , PE
Sr. Principal Engineer
Baxter Healthcare Corporation
Route 120 & Wilson Road
Round Lake, IL 60073
Tel (847) 270-4075
Fax (847) 270-4525
michael_niemotka@baxter.com



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