Re: Re: [CANSLIM] Stop losses and DHI

From: "Bill Triffet" <btriffet@earthlink.net>
Subject: Re: Re: [CANSLIM] Stop losses and DHI
Date: Mon, 9 Jun 2003 22:26:34 -0700
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Hi Tomas,

I think you partially answered yourself here. Had you bought it on the day
of the breakout 6/3 you'd still be in (maybe...).

Unfortunately VRNT gapped up the next day. I'd just pass on it and wait for
a pullback which it did on 6/6. The huge volume of the pullback though was a
red flag to me. I might have sold it even if I got it in the range due to
that. Also given the fact I've been using 7% stop-losses, I'd have been
stopped out as well.

Btw, I never use overnight buy orders as there's just too much volatility in
the first 30min. Also, I want to see the price as I buy it.

In the past I've used buy-limit orders for stocks I felt were ready to
breakout. The issue there was to make sure it had enough projected volume
for the day. If it closed up but on low volume I'd almost always have to
sell the next day. For this  reason I just stick to market orders for buys.
The trick is to get some free time during the work day to "sneak a peek" at
my watchlist.

- --
Bill



- ----- Original Message -----
From: "Tomas" <tomas986@yahoo.com>
To: <canslim@lists.xmission.com>
Sent: Monday, June 09, 2003 7:59 PM
Subject: Re: Re: [CANSLIM] Stop losses and DHI


> Bill,
>
> I did not buy DHI, but had a position on VRNT, which
> went down 12% last Friday(no stop loss order in
> place).  I sold the stock this morning and actually
> walked away with a 18% lost.  Post analysis:
>
> 1) BO on 6/3 with close $24.37 (Pivot point at
> $23.95).  Put an order to buy on 6/3 that night.  6/4
> morning, order execute at $26.21 (about 9% above pivot
> point + .10).  Bought extended, should have put a
> limit order instead of a market order?  But, if use
> market order sometime will miss the boat on a good
> stock...
>
> 2) On 6/6, stock went down $2.99.  Sold today at
> $21.53.  Should have put a stop order when I bought
> it?  Probably.
>
> Final note, if I bought it right, at pivot point +
> $.10, then I would still be in the stock today.  It
> never actually go below the 8%.  I guess my trigger
> finger is too slow, and need to be faster next time...
>
> So, this is why I am trying to figure out what kind of
> orders (stop/lost, market, limit,...) I need to do for
> buys and sells.  It's kind of though, since every kind
> of order has its pro's and con's.
>
>
> Regards,
> tomas
>
>
> --- Bill Triffet <btriffet@earthlink.net> wrote:
> > Tomas,
> > To this day the main rule I've never disagreed with
> > WON has been "preservation of capital". " Live to
> > trade another day" is the way to go.
> >
> > Appling a trailing stop after you've made some gains
> > may knock you out of the stock. Maybe it continues
> > on up after that. Maybe not. The point is you live
> > to trade another day.
> >
> > Maybe give yourself more wiggle room if a stock is
> > ramping up quickly and you've made some gains.
> > Example: 7% stop-loss right after your purchace then
> > slide it up to just at or above the pivot after
> > you've made say 10-12%. This is a very subjective
> > thing but for me it satisfies two rules.
> > 1. Sell at 7% loss - no matter what.
> > 2. Don't let a profit turn into a loss
> >
> > You didn't say when/where you bought DHI. How tight
> > was your stop?
> >
> > I have to agree with Mike that unless your doing
> > thinly traded stocks or are making some LARGE block
> > trades your trades are under the "big guys" radar
> > screens. I recall WON mentioning the phenomina at
> > one of his seminars but he does much larger trades
> > than me...
> >
> > --
> > Bill
> >
> > -------Original Message-------
> > From: Tomas <tomas986@yahoo.com>
> > Sent: 06/09/03 10:40 AM
> > To: canslim@lists.xmission.com
> > Subject: Re: [CANSLIM] Stop losses and DHI
> >
> > >
> > > So, the question is does it happens often enough
> > to
> > warrent not using stop orders?  I guess this is all
> > dependent on the investor, if he/she have time to
> > monitor intraday action and the risk tolerance
> > level.
> >
> >
> > tomas
> >
> >
> > --- michael_niemotka@baxter.com wrote:
> > >
> > > I have also been stopped out in similar instances,
> > > and I can only assume
> > > that the specialists see large blocks at certain
> > > price levels, because I
> > > cannot believe that they would manipulate the
> > market
> > > unless it was really
> > > worth the while.   My $1000 worth of stock would
> > be
> > > in the noise level if
> > > considered on its own.
> > >
> > > 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
> > >
> > >
> > >
> >
> > >
> >
> > >
> > >                     Ian <ianstm@shaw.ca>
> >
> > >
> >
> > >
> > >                     Sent by:
> > To:
> > >     canslim@lists.xmission.com
> >
> > >
> > >                     owner-canslim@lists.xm
> > cc:
> > >
> >
> > >
> > >                     ission.com
> > > Subject:     Re: [CANSLIM] Stop losses and DHI
> >
> > >
> > >
> >
> > >
> >
> > >
> > >
> >
> > >
> >
> > >
> > >                     06/09/2003 11:50 AM
> >
> > >
> >
> > >
> > >                     Please respond to
> >
> > >
> >
> > >
> > >                     canslim
> >
> > >
> >
> > >
> > >
> >
> > >
> >
> > >
> > >
> >
> > >
> >
> > >
> > >
> > >
> > >
> > >
> > > Hi Jerome:
> > >
> > > I think that your specific DHI example is just
> > plain
> > > bad data.
> > >
> > > As far as the market manipulation that you
> > describe
> > > - it occurs regularly,
> > > although on a smaller scale, and with relatively
> > > illiquid stocks. I have
> > > never seen low-volume, stop-triggering moves from
> > > $28 to $20, but I have
> > > seen them from $8 to $6.50 and from $46 to $44 and
> > > from $14 to $12 etc...
> > > In these cases, it seems the market-maker or
> > > specialist is content to allow
> > > a market sell order to be filled at a fairly large
> > > gap, which in trun
> > > triggers stops, triggering more market sells,
> > > exacerbating the price gap.
> > >
> > > Extreme swings on low volume are not meant to
> > > happen, as the mm or
> > > specialist is obligated to keep an "orderly
> > market".
> > > Although, it seems to
> > > me that "order" is in the eye of the beholder in
> > > many cases.
> > >
> > > At least 5 times in my life, I have had hard buy
> > > stops triggered (on stocks
> > > that I was short) at the highest tick of the day,
> > at
> > > a price $0.50 - $1.00
> > > higher than than the range where the shares traded
> > > almost all day. In all
> > > cases, it appeared to me that my particular stop
> > was
> > > targeted and run ...
> > > although the market definitely is a fertile ground
> > > for breeding paranoia :)
> > >
> > > Cheers,
> > >
> > > Ian
> > >
> > >
> > >  ----- Original Message -----
> > >  From: Jerome Buckmelter
> > >  To: 'CANSLIM LIST'
> > >  Sent: Sunday, June 08, 2003 9:12 AM
> > >  Subject: [CANSLIM] Stop losses and DHI
> > >
> > >  WON does not like stop losses, but says for those
> > > who cannot watch their
> > >  stocks, it..s okay.  But is it?  What are the
> > real
> > > pitfalls with stop
> > >  losses? I am concerned with what happened to DHI
> > on
> >
> === message truncated ===
>
>
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