Re: [CANSLIM] AAII letter to the editor

From: Spencer48@aol.com
Subject: Re: [CANSLIM] AAII letter to the editor
Date: Tue, 15 Jul 2003 17:20:31 EDT

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Hong:

     You didn't ask me, but...

     The 7-8% loss rule is based on WON's experiences in the Mkt:  Many times 
he has written that stocks that lose 7-8% (assuming that they are bought on 
the BO), do not BO again.  In other words, not selling at this time could be 
dangerous to your capital. 
     Moreover, while you are correct that a stock can come back after a 7-8% 
loss, according to WON if the stock had been bought at the correct time (ie on 
the BO), then that stock will most probably not come back-even taking into 
account that some stocks do come back after losing more than 7-8%.  This is 
because the stock has run up above the BO point more than the 7-8% stop loss point.
     Additionally, even though the stock does not continual to lose, I don't 
believe you are taking into account the opportunity cost of holding a stock 
which is not moving, but you hope will eventually rise.  Holding a stagnant 
stock means, while you may not be losing nominal dollars, you are losing the 
opportunity to invest in  a stock that is moving up.

jans


In a message dated 7/13/2003 11:14:20 PM Eastern Daylight Time, 
honghsu@bellatlantic.net writes:

<< 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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