From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #1457 Reply-To: canslim Sender: owner-canslim-digest@lists.xmission.com Errors-To: owner-canslim-digest@lists.xmission.com Precedence: bulk Content-Transfer-Encoding: quoted-printable X-No-Archive: yes canslim-digest Friday, June 8 2001 Volume 02 : Number 1457 In this issue: Re: [CANSLIM] 7-8% stops - edited for brevity Re: [CANSLIM] 7-8% stops - edited for brevity Re: [CANSLIM] knsy,hdl,easi Re: [CANSLIM] knsy,hdl,easi Re: [CANSLIM] 7-8% stops ---------------------------------------------------------------------- Date: Fri, 8 Jun 2001 06:46:45 -0500 From: "Norman" Subject: Re: [CANSLIM] 7-8% stops - edited for brevity This is a multi-part message in MIME format. - ------=_NextPart_000_008A_01C0EFE6.C86F2E60 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Oops, the category I was referring to was 'getting out before the 7-8% = stop kicks in'. Looks to be a falling 'knife'. Norm ----- Original Message -----=20 From: Norman=20 To: canslim@lists.xmission.com=20 Sent: Friday, June 08, 2001 6:31 AM Subject: Re: [CANSLIM] 7-8% stops - edited for brevity Tom & others, Today, would FDS fall into this category? Two days of 'churning' = closing near the lows of the day. Norm ----- Original Message -----=20 From: Tom Worley=20 To: canslim@lists.xmission.com=20 Sent: Friday, June 08, 2001 6:18 AM Subject: Re: [CANSLIM] 7-8% stops - edited for brevity Any player in the big leagues is happy batting .300, that's the same = thing as being right on only 3 out of 10 stocks. Go back and read what WON says on this in HTMMIS, it makes a lot of = sense. And you shouldn't be stopped out on all 7, some of them you = should have pulled the plug on even earlier. Tom Worley stkguru@netside.net AIM: TexWorley ----- Original Message -----=20 From: Ian=20 To: canslim@lists.xmission.com=20 Sent: Friday, June 08, 2001 1:19 AM Subject: Re: [CANSLIM] 7-8% stops - edited for brevity I have to ask - how many out of a hundred do you expect to go up = several hundred percent (whether or not they were sold prematurely)? I must admit, there is no way I would be comfortable being stopped = me out of 7 or 8 trades out of every 10 - I would tighten my criteria = considerably. JMHO. Ian ----- Original Message -----=20 From: Tom Worley=20 To: canslim@lists.xmission.com=20 Sent: Thursday, June 07, 2001 8:28 PM Subject: Re: [CANSLIM] 7-8% stops - edited for brevity Hi Norman, Be careful about abandoning the 7-8% stop loss rule, it is valid = and time tested. When WON first started building all his rules, he used = 10%, and found that he was losing too much money when he was wrong. = Eventually, he ended up at 8%. But he also says that you should not = average an 8% loss when you are wrong, you should be exiting some of = them even before your stop is hit. So your average should be more like 5 = or 6% when you are wrong. If you are finding that an 8% stop loss on your entry is = stopping you out too often on stocks that subsequently take off from = just below your stop price, then you need to work on your entry, not = expand your stop loss percentage. With CANSLIM, you can only expect to be right about 2 or 3 times = out of 10. So long as you keep your losses tight when you are wrong, = then the ones that work will still give you net profits. But if you = start taking 10% or so losses consistently, then the few that work have = too much loss to overcome unless you hit a major winner. And in my opinion, if you get a major winner more than once or = twice out of a hundred, you're either very good or very lucky (and I = define a major winner as one that goes up several hundred percent before = you sell). Tom Worley stkguru@netside.net AIM: TexWorley ----- Original Message -----=20 From: Norman=20 To: canslim@lists.xmission.com=20 Sent: Thursday, June 07, 2001 11:05 PM Subject: Re: [CANSLIM] 7-8% stops - edited for brevity I like that point Tom. I am new to canslim and stocks in = general, but it sure makes sense to set the s/l just below the support = level. Having been stopped out of numerous stocks recently, some that = only dipped briefly and then went on to new highs quickly (i.e. FEIC) , = I have abandoned the arbitrary 7-8%. I now use a point just under the = support level, if it is close by. I don't want to set my stop more than = 12-13% below my purchase but to set a stop just a couple of % points = above a support level seems silly; at least in this market. Norman ----- Original Message -----=20 From: "Tom Worley" To: Sent: Wednesday, June 06, 2001 8:14 AM Subject: Re: [CANSLIM] 7-8% stops=20 > If I have bot a stock correctly, on a valid breakout, but it > fails to maintain that breakout, I continue my original = mental > stop loss. I want my entry point to be such that a stop of = 7-8% > will be under the base. If I have done this, then a return = to the > base still does not trigger the stop. >=20 > I don't view a failed breakout, BY ITSELF, as a reason for > selling, thus don't want my stop hit. >=20 > Tom Worley > stkguru@netside.net > AIM: TexWorley - ------=_NextPart_000_008A_01C0EFE6.C86F2E60 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
Oops, the category I was referring to was 'getting out before the = 7-8% stop=20 kicks in'.  Looks to be a falling 'knife'.
 
Norm
----- Original Message -----
From:=20 Norman
Sent: Friday, June 08, 2001 = 6:31 AM
Subject: Re: [CANSLIM] 7-8% = stops -=20 edited for brevity

Tom & others,
 
Today, would FDS fall into this category?  Two days of = 'churning'=20 closing near the lows of the day.
 
Norm
----- Original Message -----
From:=20 Tom=20 Worley
Sent: Friday, June 08, 2001 = 6:18=20 AM
Subject: Re: [CANSLIM] 7-8% = stops -=20 edited for brevity

Any player in the big leagues is happy batting = .300,=20 that's the same thing as being right on only 3 out of 10=20 stocks.
 
Go back and read what WON says on this in = HTMMIS, it makes=20 a lot of sense. And you shouldn't be stopped out on all 7, some of = them you=20 should have pulled the plug on even earlier.
 
Tom Worley
stkguru@netside.net
AIM:=20 TexWorley
----- Original Message ----- =
From:=20 Ian =
To: canslim@lists.xmission.com= =20
Sent: Friday, June 08, 2001 = 1:19=20 AM
Subject: Re: [CANSLIM] 7-8% = stops -=20 edited for brevity

I have to ask - how many out of a hundred do=20 you expect to go up several hundred percent (whether or not = they were=20 sold prematurely)?
 
I must admit, there is no way I would be=20 comfortable being stopped me out of 7 or 8 trades out of every 10 = - - I=20 would tighten my criteria considerably. JMHO.
 
Ian
 
 
----- Original Message ----- =
From:=20 Tom=20 Worley
To: canslim@lists.xmission.com= =20
Sent: Thursday, June 07, = 2001 8:28=20 PM
Subject: Re: [CANSLIM] = 7-8% stops -=20 edited for brevity

Hi Norman,
 
Be careful about abandoning the 7-8% stop = loss rule,=20 it is valid and time tested.  When WON first started = building all=20 his rules, he used 10%, and found that he was losing too much = money when=20 he was wrong. Eventually, he ended up at 8%. But he also says = that you=20 should not average an 8% loss when you are wrong, you should be = exiting=20 some of them even before your stop is hit. So your average = should be=20 more like 5 or 6% when you are wrong.
 
If you are finding that an 8% stop loss on = your entry=20 is stopping you out too often on stocks that subsequently take = off from=20 just below your stop price, then you need to work on your entry, = not=20 expand your stop loss percentage.
 
With CANSLIM, you can only expect to be = right about 2=20 or 3 times out of 10.  So long as you keep your losses = tight when=20 you are wrong, then the ones that work will still give you net=20 profits.  But if you start taking 10% or so losses = consistently,=20 then the few that work have too much loss to overcome unless you = hit a=20 major winner.
 
And in my opinion, if you get a major winner = more than=20 once or twice out of a hundred, you're either very good or very = lucky=20 (and I define a major winner as one that goes up several hundred = percent=20 before you sell).
 
Tom Worley
stkguru@netside.net
AIM:=20 TexWorley
----- Original Message ----- =
From:=20 Norman=20
To: canslim@lists.xmission.com= =20
Sent: Thursday, June = 07, 2001=20 11:05 PM
Subject: Re: [CANSLIM] = 7-8% stops=20 - edited for brevity

I like that point Tom.  I am new to canslim and = stocks in=20 general, but it sure makes sense to set the s/l just below the = support=20 level.  Having been stopped out of numerous stocks = recently, some=20 that only dipped briefly and then went on to new highs quickly = (i.e.=20 FEIC) , I have abandoned the arbitrary 7-8%.  I now use a = point=20 just under the support level, if it is close by.  I don't = want to=20 set my stop more than 12-13% below my purchase but to set a = stop just=20 a couple of % points above a support level seems silly; at = least in=20 this market.
 
Norman
 
----- Original Message -----=20
From: "Tom Worley" <stkguru@netside.net>
To: <canslim@lists.xmission.com= >
Sent: Wednesday, June 06, 2001 8:14 AM
Subject: Re: [CANSLIM] 7-8% stops

> If I have bot a stock correctly, on a = valid=20 breakout, but it
> fails to maintain that breakout, I = continue=20 my original mental
> stop loss. I=20 want my entry point to be such that a stop of 7-8%
> = will be=20 under the base. If I have done this, then a = return to=20 the
> base still does not trigger the stop.
> =
> I=20 don't view a failed breakout, BY ITSELF, as a reason = for
>=20 selling, thus don't want my stop hit.
>
> Tom=20 Worley
> stkguru@netside.net
> AIM: = = TexWorley
- ------=_NextPart_000_008A_01C0EFE6.C86F2E60-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Fri, 8 Jun 2001 08:02:24 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] 7-8% stops - edited for brevity This is a multi-part message in MIME format. - ------=_NextPart_000_0058_01C0EFF1.5B1C1DE0 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable The Intel mid-quarter briefing seems to have inspired the market, at = least so far in Europe. Futures earlier were up nearly 2%, now less than = 1%, so a strong opening is not so assured right now as it was looking. = But if FDS is unable to start showing some strong signs of recovering, = or at least establishing institutional support, then I would be inclined = to pull the plug on it. The past two days look to me to be very weak. Tom Worley stkguru@netside.net AIM: TexWorley ----- Original Message -----=20 From: Norman=20 To: canslim@lists.xmission.com=20 Sent: Friday, June 08, 2001 7:46 AM Subject: Re: [CANSLIM] 7-8% stops - edited for brevity Oops, the category I was referring to was 'getting out before the 7-8% = stop kicks in'. Looks to be a falling 'knife'. Norm ----- Original Message -----=20 From: Norman=20 To: canslim@lists.xmission.com=20 Sent: Friday, June 08, 2001 6:31 AM Subject: Re: [CANSLIM] 7-8% stops - edited for brevity Tom & others, Today, would FDS fall into this category? Two days of 'churning' = closing near the lows of the day. Norm ----- Original Message -----=20 From: Tom Worley=20 To: canslim@lists.xmission.com=20 Sent: Friday, June 08, 2001 6:18 AM Subject: Re: [CANSLIM] 7-8% stops - edited for brevity Any player in the big leagues is happy batting .300, that's the = same thing as being right on only 3 out of 10 stocks. Go back and read what WON says on this in HTMMIS, it makes a lot = of sense. And you shouldn't be stopped out on all 7, some of them you = should have pulled the plug on even earlier. Tom Worley stkguru@netside.net AIM: TexWorley ----- Original Message -----=20 From: Ian=20 To: canslim@lists.xmission.com=20 Sent: Friday, June 08, 2001 1:19 AM Subject: Re: [CANSLIM] 7-8% stops - edited for brevity I have to ask - how many out of a hundred do you expect to go up = several hundred percent (whether or not they were sold prematurely)? I must admit, there is no way I would be comfortable being = stopped me out of 7 or 8 trades out of every 10 - I would tighten my = criteria considerably. JMHO. Ian ----- Original Message -----=20 From: Tom Worley=20 To: canslim@lists.xmission.com=20 Sent: Thursday, June 07, 2001 8:28 PM Subject: Re: [CANSLIM] 7-8% stops - edited for brevity Hi Norman, Be careful about abandoning the 7-8% stop loss rule, it is = valid and time tested. When WON first started building all his rules, = he used 10%, and found that he was losing too much money when he was = wrong. Eventually, he ended up at 8%. But he also says that you should = not average an 8% loss when you are wrong, you should be exiting some of = them even before your stop is hit. So your average should be more like 5 = or 6% when you are wrong. If you are finding that an 8% stop loss on your entry is = stopping you out too often on stocks that subsequently take off from = just below your stop price, then you need to work on your entry, not = expand your stop loss percentage. With CANSLIM, you can only expect to be right about 2 or 3 = times out of 10. So long as you keep your losses tight when you are = wrong, then the ones that work will still give you net profits. But if = you start taking 10% or so losses consistently, then the few that work = have too much loss to overcome unless you hit a major winner. And in my opinion, if you get a major winner more than once or = twice out of a hundred, you're either very good or very lucky (and I = define a major winner as one that goes up several hundred percent before = you sell). Tom Worley stkguru@netside.net AIM: TexWorley ----- Original Message -----=20 From: Norman=20 To: canslim@lists.xmission.com=20 Sent: Thursday, June 07, 2001 11:05 PM Subject: Re: [CANSLIM] 7-8% stops - edited for brevity I like that point Tom. I am new to canslim and stocks in = general, but it sure makes sense to set the s/l just below the support = level. Having been stopped out of numerous stocks recently, some that = only dipped briefly and then went on to new highs quickly (i.e. FEIC) , = I have abandoned the arbitrary 7-8%. I now use a point just under the = support level, if it is close by. I don't want to set my stop more than = 12-13% below my purchase but to set a stop just a couple of % points = above a support level seems silly; at least in this market. Norman ----- Original Message -----=20 From: "Tom Worley" To: Sent: Wednesday, June 06, 2001 8:14 AM Subject: Re: [CANSLIM] 7-8% stops=20 > If I have bot a stock correctly, on a valid breakout, but = it > fails to maintain that breakout, I continue my original = mental > stop loss. I want my entry point to be such that a stop of = 7-8% > will be under the base. If I have done this, then a return = to the > base still does not trigger the stop. >=20 > I don't view a failed breakout, BY ITSELF, as a reason for > selling, thus don't want my stop hit. >=20 > Tom Worley > stkguru@netside.net > AIM: TexWorley - ------=_NextPart_000_0058_01C0EFF1.5B1C1DE0 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
The Intel mid-quarter briefing seems to have = inspired the=20 market, at least so far in Europe. Futures earlier were up nearly 2%, = now less=20 than 1%, so a strong opening is not so assured right now as it was = looking. But=20 if FDS is unable to start showing some strong signs of recovering, or at = least=20 establishing institutional support, then I would be inclined to pull the = plug on=20 it.
 
The past two days look to me to be very = weak.
 
Tom Worley
stkguru@netside.net
AIM:=20 TexWorley
----- Original Message -----
From:=20 Norman
To: canslim@lists.xmission.com =
Sent: Friday, June 08, 2001 = 7:46 AM
Subject: Re: [CANSLIM] 7-8% = stops -=20 edited for brevity

Oops, the category I was referring to was 'getting out before the = 7-8%=20 stop kicks in'.  Looks to be a falling 'knife'.
 
Norm
----- Original Message -----
From:=20 Norman
To: canslim@lists.xmission.com =
Sent: Friday, June 08, 2001 = 6:31=20 AM
Subject: Re: [CANSLIM] 7-8% = stops -=20 edited for brevity

Tom & others,
 
Today, would FDS fall into this category?  Two days of = 'churning'=20 closing near the lows of the day.
 
Norm
----- Original Message ----- =
From:=20 Tom=20 Worley
To: canslim@lists.xmission.com =
Sent: Friday, June 08, 2001 = 6:18=20 AM
Subject: Re: [CANSLIM] 7-8% = stops -=20 edited for brevity

Any player in the big leagues is happy batting = .300,=20 that's the same thing as being right on only 3 out of 10=20 stocks.
 
Go back and read what WON says on this in = HTMMIS, it=20 makes a lot of sense. And you shouldn't be stopped out on all 7, = some of=20 them you should have pulled the plug on even earlier.
 
Tom Worley
stkguru@netside.net
AIM:=20 TexWorley
----- Original Message ----- =
From:=20 Ian
To: canslim@lists.xmission.com
Sent: Friday, June 08, = 2001 1:19=20 AM
Subject: Re: [CANSLIM] = 7-8% stops -=20 edited for brevity

I have to ask - how many out of a hundred do = you expect to go up several hundred percent (whether or not = they=20 were sold prematurely)?
 
I must admit, there is no way I = would be=20 comfortable being stopped me out of 7 or 8 trades out of every = 10 - I=20 would tighten my criteria considerably. JMHO.
 
Ian
 
 
----- Original Message ----- =
From:=20 Tom=20 Worley
To: canslim@lists.xmission.com
Sent: Thursday, June = 07, 2001=20 8:28 PM
Subject: Re: [CANSLIM] = 7-8% stops=20 - edited for brevity

Hi Norman,
 
Be careful about abandoning the 7-8% stop = loss rule,=20 it is valid and time tested.  When WON first started = building all=20 his rules, he used 10%, and found that he was losing too much = money=20 when he was wrong. Eventually, he ended up at 8%. But he also = says=20 that you should not average an 8% loss when you are wrong, you = should=20 be exiting some of them even before your stop is hit. So your = average=20 should be more like 5 or 6% when you are wrong.
 
If you are finding that an 8% stop loss on = your=20 entry is stopping you out too often on stocks that = subsequently take=20 off from just below your stop price, then you need to work on = your=20 entry, not expand your stop loss percentage.
 
With CANSLIM, you can only expect to be = right about=20 2 or 3 times out of 10.  So long as you keep your losses = tight=20 when you are wrong, then the ones that work will still give = you net=20 profits.  But if you start taking 10% or so losses = consistently,=20 then the few that work have too much loss to overcome unless = you hit a=20 major winner.
 
And in my opinion, if you get a major = winner more=20 than once or twice out of a hundred, you're either very good = or very=20 lucky (and I define a major winner as one that goes up several = hundred=20 percent before you sell).
 
Tom Worley
stkguru@netside.net
AIM:=20 TexWorley
----- Original Message ----- =
From:=20 Norman=20
To: canslim@lists.xmission.com=20
Sent: Thursday, June = 07, 2001=20 11:05 PM
Subject: Re: = [CANSLIM] 7-8%=20 stops - edited for brevity

I like that point Tom.  I am new to canslim and = stocks in=20 general, but it sure makes sense to set the s/l just below = the=20 support level.  Having been stopped out of numerous = stocks=20 recently, some that only dipped briefly and then went on to = new=20 highs quickly (i.e. FEIC) , I have abandoned the arbitrary=20 7-8%.  I now use a point just under the support level, = if it is=20 close by.  I don't want to set my stop more than 12-13% = below=20 my purchase but to set a stop just a couple of % points = above a=20 support level seems silly; at least in this market.
 
Norman
 
----- Original Message -----=20
From: "Tom Worley" <stkguru@netside.net>
To: <canslim@lists.xmission.com= >
Sent: Wednesday, June 06, 2001 8:14 AM
Subject: Re: [CANSLIM] 7-8% stops

> If I have bot a stock correctly, on a = valid=20 breakout, but it
> fails to maintain that breakout, I = continue=20 my original mental
> stop loss. I=20 want my entry point to be such that a stop of 7-8%
> = will be=20 under the base. If I have done this, then a = return=20 to the
> base still does not trigger the stop.
> =
> I don't view a failed breakout, BY ITSELF, as a = reason=20 for
> selling, thus don't want my stop hit.
> =
>=20 Tom Worley
> stkguru@netside.net
>=20 AIM:=20 = TexWorley
- ------=_NextPart_000_0058_01C0EFF1.5B1C1DE0-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Fri, 8 Jun 2001 08:31:12 EDT From: BIKEAR@aol.com Subject: Re: [CANSLIM] knsy,hdl,easi - --part1_e3.15de4dce.28521f90_boundary Content-Type: text/plain; charset="US-ASCII" Content-Transfer-Encoding: 7bit what would you consider the pivot p on these...knsy everything looks good except earning stability is high ROR is 14%, HDL grp. RS is 99, ROE 17%,easi- grp RS is 88, debt is 80%... they all look like there in the handle and have BO..thanks jan - --part1_e3.15de4dce.28521f90_boundary Content-Type: text/html; charset="US-ASCII" Content-Transfer-Encoding: 7bit what would you consider the pivot p on these...knsy everything looks good
except earning stability is high ROR is 14%, HDL grp. RS is 99, ROE 17%,easi-
grp RS is 88, debt is 80%... they all look like there in the handle and have
BO..thanks jan - --part1_e3.15de4dce.28521f90_boundary-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Fri, 8 Jun 2001 08:43:12 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] knsy,hdl,easi This is a multi-part message in MIME format. - ------=_NextPart_000_006C_01C0EFF7.0DE44C40 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable I was just looking at KNSY, it is way too extended. Add to that it's = forecast is for only 12% earnings growth, and to do that it must match = year ago Q4 of 22 cents, its best ever. I doubt that will happen, but if = it does then it still would show zero growth. HDL - not as extended, but forecast is for only 10% growth, and its a = retail stock, where money is already fleeing. EASI - there's been a lot of prior discussion on this one, so I would = suggest reviewing the archives. Right now suggests a HTF (High Tight = Flag) formation to me, but I am a novice at recognizing or using this = type formation. Tom Worley stkguru@netside.net AIM: TexWorley ----- Original Message -----=20 From: BIKEAR@aol.com=20 To: canslim@lists.xmission.com=20 Sent: Friday, June 08, 2001 8:31 AM Subject: Re: [CANSLIM] knsy,hdl,easi what would you consider the pivot p on these...knsy everything looks = good=20 except earning stability is high ROR is 14%, HDL grp. RS is 99, ROE = 17%,easi-=20 grp RS is 88, debt is 80%... they all look like there in the handle = and have=20 BO..thanks jan=20 - ------=_NextPart_000_006C_01C0EFF7.0DE44C40 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
I was just looking at KNSY, it is way too extended. = Add to=20 that it's forecast is for only 12% earnings growth, and to do that it = must match=20 year ago Q4 of 22 cents, its best ever. I doubt that will happen, but if = it does=20 then it still would show zero growth.
 
HDL - not as extended, but forecast is for only 10% = growth,=20 and its a retail stock, where money is already fleeing.
 
EASI - there's been a lot of prior discussion on = this one, so=20 I would suggest reviewing the archives. Right now suggests a HTF (High = Tight=20 Flag) formation to me, but I am a novice at recognizing or using this = type=20 formation.
 
Tom Worley
stkguru@netside.net
AIM:=20 TexWorley
----- Original Message -----
From:=20 BIKEAR@aol.com
To: canslim@lists.xmission.com =
Sent: Friday, June 08, 2001 = 8:31 AM
Subject: Re: [CANSLIM]=20 knsy,hdl,easi

what would = you consider=20 the pivot p on these...knsy everything looks good
except earning = stability=20 is high ROR is 14%, HDL grp. RS is 99, ROE 17%,easi-
grp RS is 88, = debt is=20 80%... they all look like there in the handle and have
BO..thanks=20 jan - ------=_NextPart_000_006C_01C0EFF7.0DE44C40-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Fri, 8 Jun 2001 05:51:52 -0700 From: "Tracie Oken" Subject: Re: [CANSLIM] 7-8% stops The 7-8% rule came about because they found that great stocks rarely dropped 7-8% "below the pivot". (Not because they think 7-8% is a reasonable amount to risk.) Therefore, you could buy a stock at 5% above its pivot and get stopped out at 2% below but that would still be considered a normal pullback (and if you were lucky enough to buy right at the pivot you would not be stopped out). The problem is (as has been mentioned here before) that it is almost impossible for the average investor to buy a stock right at the pivot. It makes the case that you should set your stop at 7-8% below the pivot even though your buy point may create a larger loss then 7-8%. If you still keep to the rule of not buying beyond 5% on the upside this should give you a maximum loss of approximately 12%. Yes, Tom, this will increase your dollar losses on each stock but it should also increase your percentage of winning picks to greater than .300. - ----- Original Message ----- From: "Dave Cameron" To: Sent: Tuesday, June 05, 2001 8:51 PM Subject: [CANSLIM] 7-8% stops > A few people have mentioned the hard 7-8% stop as insurance against > taking a big loss. > > You know, I never use it. Its not that I don't set a stop - but I > do it based on the chart - not on a percentage. As an example, > suppose a stock has been basing between 25 and 30 for several months, > then breaks out to 33 on high volume. If I bought at 33 (which is > higher than WON says to buy - but for those of us who can't trade > real-time...) my stop point would be 29.90 (I can't get used to > decimals yet). Because this would put it back in the base. All > right, its a 10% stop - but its common for a stock like this to drop > 8-9% to say, 30.25 and then bounce back up. Of course, if I were > fortunate enough to buy the same stock at 30.5, I'd still have a stop > at 29.90, and then have a 1-2% stop. The percentage isn't relevant > - the placement relative to the chart action is. > > Anyone else have any thoughts? > > > ===== > Dave Cameron > dfcameron@yahoo.com > > __________________________________________________ > Do You Yahoo!? > Get personalized email addresses from Yahoo! Mail - only $35 > a year! http://personal.mail.yahoo.com/ > > - > -To subscribe/unsubscribe, email "majordomo@xmission.com" > -In the email body, write "subscribe canslim" or > -"unsubscribe canslim". Do not use quotes in your email. - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ End of canslim-digest V2 #1457 ****************************** To unsubscribe to canslim-digest, send an email to "majordomo@xmission.com" with "unsubscribe canslim-digest" in the body of the message. For information on digests or retrieving files and old messages send "help" to the same address. Do not use quotes in your message.