Re: [CANSLIM] AAII letter to the editor

From: Hong Hsu <honghsu@bellatlantic.net>
Subject: Re: [CANSLIM] AAII letter to the editor
Date: Sun, 13 Jul 2003 23:13:23 -0400

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Katherine,

I agree all of your opinions with one exception.  That is,  always cut 
your loss at 7% or 8% from your entry price.    I can not find evidence 
to support that logically from Mr. O'Neil's book or from my experience.  

It seems to me that if a stock fails from its first breakout,  then the 
rule holds TRUE.  But after first breakout, the stock may build its 
second flat base, or continue went up for a while.  You may buy at pull 
back, support line or on the top of second flat base.  In these cases, 
if you stick with 7% or 8% loss rule, most likely you will be forced out 
because of volatile.   In a message I post two days ago,  I was trying 
to find a solution to the issue.  But got no response.

I am thinking to use price progress and time to determine stop, 
something like Parabolic System from  http://www.tradertalk.com/,   OR 
simply use %, but instead measure from entry point, you measure it from 
first pivot OR Fibonacci retreat line.

Your comments will be appreciated,
- -Hong





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