From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #1971 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 Wednesday, December 19 2001 Volume 02 : Number 1971 In this issue: Re: [CANSLIM] Whither EPIQ? Re: [CANSLIM] Acc/Dis Numbers Re: [CANSLIM] Whither EPIQ? Re: [CANSLIM] Devil's Advocate: Why bother with fundamentals? Re: [CANSLIM] breakouts - return to base Re: [CANSLIM] Leader's List Re: [CANSLIM] breakouts - return to base Re: [CANSLIM] clarification ---------------------------------------------------------------------- Date: Mon, 10 Dec 2001 15:21:36 EST From: Spencer48@aol.com Subject: Re: [CANSLIM] Whither EPIQ? Katherine: Interesting theory (and commonsensically it would seem to be valid), but how are you able to identify retail vs. non-retail trading (and I assume non-retail would be money stock funds, ie. big investors)? Do you look at the block trades for individual stocks? And, if so, where do you find them? jans In a message dated 12/10/2001 2:00:04 PM Eastern Standard Time, kmalm@earthlink.net writes: << I have one more theory I might throw out here and, once again, EPIQ is an example. In general, I think of this as the "too many eyes on a few stocks theory." But I have actually named it the "123 Effect..... The failure around the breakout point and the high level of retail activity around that breakout point lead me to believe that there was a definable "123 Effect." >> - - - -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: Mon, 10 Dec 2001 14:42:49 -0600 From: "Norman" Subject: Re: [CANSLIM] Acc/Dis Numbers That was excellent Tim. Thanks. Norm - ----- Original Message ----- From: "Tim Fisher" To: Sent: Monday, December 10, 2001 7:57 AM Subject: Re: [CANSLIM] Acc/Dis Numbers > I plotted the data in an Excel spreadhseet...attached. Clearly shows the > "walls of worry" in April and Nov/Dec. month. > > At 03:57 AM 12/10/2001 -0500, you wrote: > >Thanks, Robert, I had been wondering how much longer it would take to see > >"Market in correction" go away! > > > >What is the next threshold, and what will it take for the numbers to > >achieve that? > > > >Tom Worley > >stkguru@netside.net > >AIM: TexWorley > >>----- Original Message ----- > >>From: Robert > >>To: canslim@lists.xmission.com > >>Sent: Sunday, December 09, 2001 10:41 PM > >>Subject: [CANSLIM] Acc/Dis Numbers > >> > >>Hello everyone. Here are the latest Acc/Dis numbers. PLEASE take note > >>that the market has returned to a "stable condition" on 12/7!! The last > >>time the market this occoured was 5 months ago on 7/6/01. So things are > >>looking up. Let the Bull return.... > >> > >>Robert > >> > >> > >> > >> > >>Spread sheet version > >> > >>Date,A,B,C,D,E,% of AB/A:E,%E,Market Posture > >> > >>11/30/01,651,2299,1232,930,305,54%,6%,Market in correction > >>12/3/01,715,2371,1201,860,281,57%,5%,Market in correction > >>12/4/01,695,2392,1181,878,282,57%,5%,Market in correction > >>12/5/01,678,2360,1204,885,288,56%,5%,Market in correction > >>12/6/01,736,2440,1173,814,263,59%,5%,Market in correction > >>12/7/01,924,2470,1064,754,239,62%,4%,Market stable > >>12/10/01,984,2450,1058,728,248,63%,5%,Market stable > >> > > > >Tim Fisher > >Ore-ROCK-On Rockhounding Web Site > >Pacific Fishery Biologists Information > >mailto:tim@OreRockOn.com > >WWW http://OreRockOn.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. ------------------------------ Date: Wed, 19 Dec 2001 14:32:07 -0600 From: "Katherine Malm" Subject: Re: [CANSLIM] Whither EPIQ? jans, This is amazing. It's 3 pm 12/18 and I am just now seeing this post. I thought it curious that there was no feedback on the 123theory. Now I know it was cyberdrama. In order to identify retail vs block trade, I called my Schwab team and had them pull the tick data from their Reuters screen. I gave them several stocks over a period of time and had them calculate the % of trades under and above a threshold that would typically indicate retail vs. institutional block trades. On EPIQ, the trading is somewhat thinner than most, so we set the threshold at 5000 shares. But on all the rest of the stocks we reviewed, the threshold was set at 10000. Katherine - ----- Original Message ----- From: To: Sent: Monday, December 10, 2001 2:21 PM Subject: Re: [CANSLIM] Whither EPIQ? > Katherine: > > Interesting theory (and commonsensically it would seem to be valid), but > how are you able to identify retail vs. non-retail trading (and I assume > non-retail would be money stock funds, ie. big investors)? Do you look at > the block trades for individual stocks? And, if so, where do you find them? > > jans > > > > In a message dated 12/10/2001 2:00:04 PM Eastern Standard Time, > kmalm@earthlink.net writes: > > << I have one more theory I might throw out here and, once again, EPIQ is an > example. In general, I think of this as the "too many eyes on a few stocks > theory." But I have actually named it the "123 Effect..... The failure > around the breakout point and the high level of retail activity around that > breakout point lead me to believe that there was a definable "123 Effect." >> > > > - > -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. ------------------------------ Date: Wed, 19 Dec 2001 14:40:20 -0600 From: "Katherine Malm" Subject: Re: [CANSLIM] Devil's Advocate: Why bother with fundamentals? Good points, jans. I suppose in a market where everyone is worried that the rally will end at any moment, the fear and greed cycle gets compressed. And yes, I believe fund managers add to the cycles, they are, afterall, human and they are driven by performance review objectives if they are to generate their year-end bonuses. Too bad it'll only be $2million this year instead of the usual $10million. Sniff, sniff, get me a Kleenex, will you? Katherine - ----- Original Message ----- From: To: Sent: Wednesday, December 19, 2001 11:54 AM Subject: Re: [CANSLIM] Devil's Advocate: Why bother with fundamentals? > Katherine: > > You put it in a nutshell: Technicals are a proxy for human psychology. > Overbought/Oversold indicators imply that. But then, one can wonder: why do > OB/OS work one time but not another. Because , I believe, human action is > based, at least in the stock market, on two things: Greed and Fear. So, why > the parabolic going up: Because stock pickers are greedy. And why the > parabolic going down: Because no one wants to be left holding the bag. > > Thus when INVN made it's explosive parabolic assault to the top, it was > logical: Pickers didn't want to be left lingering on the ground (even those > who don't know what "tomography technology" is). They were greedy, thus, the > rise. As a matter of fact, Tom's alert that once an LLUR changes angles one > should be wary of holding that stock suggests that. As does one of WON's > selling points, when he advises to sell if the stock makes a Very Prominent > one day move (ie, it moves more-percentage wise-in one day than it has in 1 > month). > > What would be interesting would be to see if fund managers are also > caught up in the Greed/Fear dichotomy. And are they actually caught up in > those two emotions, or are they just trying to exploit them? > > jans > > > In a message dated 12/19/2001 11:55:46 AM Eastern Standard Time, > kmalm@earthlink.net writes: > > << My gut feel on this is that technicals are a > proxies for human action and reaction. In *most* cases, we can assume that > people will react a certain way in a given circumstance. For example, when a > stock in an underlying uptrend moves away from the intermediate term trend > and starts to go too far too fast, we assume that there will be some people > who will perceive it as "going too far too fast" and sell it or short it. > That action brings the stock back to the underlying intermediate term trend. > But nothing has changed fundamentally about the company in this short time > period. It's just perception about price and the resulting supply/demand. > > But every once and a while, these things confound us. Just look at INVN > recently. Did it make sense that it went parabolic? I don't think so. Did it > continue to go up in price *despite* the fact that early in that parabolic > rise we thought the probability that it could continue the move for another > week was very low? >> > > - > -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. ------------------------------ Date: Mon, 10 Dec 2001 15:29:25 EST From: Spencer48@aol.com Subject: Re: [CANSLIM] breakouts - return to base Kent: This is just my opinion, and perhaps I should just let it go, but it really seems an unfair demand that you ask from Katherine. I believe Katherine has already made her MANY analyses "meaningful". In my opinion, if you have a specific query (rather than relying on the all-encompassing "meaningful") then you should ask it. jans In a message dated 12/10/2001 2:48:19 PM Eastern Standard Time, kent_norman@yahoo.com writes: << Thanks Katherine You are putting some flesh on the bones. Makes it more meaningful >> - - - -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: 10 Dec 2001 12:12:30 -0800 From: "Tim Fisher" Subject: Re: [CANSLIM] Leader's List Looks like UTSI and INTV are definitely countertrend today. I guess some breakouts have to succeed, right? Too bad about ASIA. At 07:30 PM 12/9/2001 -0800, you wrote: >Here is a new Leader's List for your reading pleasure. I put this list >together with my own version of the IBD composite rating, and the following >stocks ranked as the highest 150 or so stocks as of Friday's close. The >list is just based on the rankings of the stocks, so do you own DD, and >especially look at the charts. I also include Industry Group RS in my >rank, so some stocks will be penalized for their group RS when the group >may be moving up strongly (and this is something I want to look at changing >in the future). Standard disclosure - Of the list, I own UTSI, ECTL, and >ASIA. > Tim Fisher Ore-ROCK-On Rockhounding Web Site Pacific Fishery Biologists Information mailto:tim@OreRockOn.com WWW http://OreRockOn.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. ------------------------------ Date: Wed, 19 Dec 2001 14:45:53 -0600 From: "Katherine Malm" Subject: Re: [CANSLIM] breakouts - return to base Hah...8 days later, this may well have been cleared up. But I think Kent was saying that "the analysis *did* make it more meaningful", not "please make your analysis more meaningful." I would blame this sort of thing on email communication, but it happens in real life when people are talking one on one! Katherine - ----- Original Message ----- From: To: Sent: Monday, December 10, 2001 2:29 PM Subject: Re: [CANSLIM] breakouts - return to base > Kent: > > This is just my opinion, and perhaps I should just let it go, but it > really seems an unfair demand that you ask from Katherine. > > I believe Katherine has already made her MANY analyses "meaningful". In > my opinion, if you have a specific query (rather than relying on the > all-encompassing "meaningful") then you should ask it. > > jans > > > In a message dated 12/10/2001 2:48:19 PM Eastern Standard Time, > kent_norman@yahoo.com writes: > > << Thanks Katherine > You are putting some flesh on the bones. Makes it more > meaningful >> > > - > -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. ------------------------------ Date: Thu, 13 Dec 2001 08:04:31 -0600 From: Subject: Re: [CANSLIM] clarification This is a multi-part message in MIME format. - ------=_NextPart_000_002F_01C183AC.CB56C700 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable katherine, very interesting! is this saying that cups w/o handles have a = better return rate than w/handles? isn't this contrary to WON's = writings? how does your own personal experience relate to this? thank = you, david ----- Original Message -----=20 From: Katherine Malm=20 To: canslim@lists.xmission.com=20 Sent: Thursday, December 13, 2001 7:10 AM Subject: Re: [CANSLIM] clarification Norm, See my notes in bold. In general, he is trying to match the formation to WON's criteria. = When looking for the C&H pattern, cups had to have handles of at least = one week to qualify. Handles had to be in upper half, but there were = some in the study that were marginally in the upper half and included = anyway. Cups had to be U shaped. No V shapes were included. (Guess he = doesn't like drinking his coffee from a funnel.) Price has to have risen = 30% before the cup was formed. Cup has to take 7 to 65 weeks to form.=20 Thanks for relaying the interesting Bulkowski info. Mr. B = definitely is on my coffee table list. I have a 'couple' of questions. 1) "Cups with higher right lips tend to outperform those with a = higher left lip." Why would this be? Who knows? It's a mystery. But the = differences were statistically significant. 2) "Failure rate if waited for upside B/O 5%." Is 'upside B/O' when = it goes above the left side? B/O occurs when it breaks above the high of = the handle. Does vol play a roll here? He did not include volume as = criteria for B/O because removing the criteria hurt performance, but = only slightly. He does give statistics on volume at breakout and after, = and the volume tends to be very high. Only 5% failure with these is = surprising. And failure is when the price falls back to the pivot? No, = failure is when the price falls below the pivot and heads down. A = pullback to the pivot that subsequently moves on is considered a = "throwback" or pullback, and is not considered a failure. This chapter alone is worth the price of the book. The ROI makes = this investment a big winner. Katherine Norm ----- Original Message -----=20 From: "Katherine Malm" To: Sent: Wednesday, December 12, 2001 10:18 PM Subject: Re: [CANSLIM] clarification > Bulkowski (Encyclopedia of Chart Patterns) gives statistics on C&H = and cups > w/o handles: >=20 > C&H: > Failure rate 26% > Failure rate if waited for B/O 10% <<<<--------------<<<<<<<<< > Average rise 38%, most likely 10-20% > Cups with higher right lips tend to outperform those with a higher = left lip. > Avg gain 40% vs 35%. >=20 > C w/o H (Rounding Bottoms): > Failure rate 38% > Failure rate if waited for upside B/O 5% = <<<<---------------<<<<<<<<< > Average rise 54%, most likely 20% >=20 > Nothing on flat bases. >=20 > Katherine > ----- Original Message ----- > From: "Tangen, Eric" > To: > Sent: Wednesday, December 12, 2001 9:41 PM > Subject: RE: [CANSLIM] clarification >=20 >=20 > > The 40% number is an amalgam of a number of anecdotes from a few = different > > sources. Its all word of mouth. No names to given protect the = guilty. > > > > You can almost infer such a number from WON himself...I'd bet if = you asked > > the big-O-man in a seminar he'd deflect the question to point = out how much > > you are ahead having 1 big gain out of 2-5 trades. > > > > > > ERIC TANGEN > > > > -----Original Message----- > > From: camelot.homes@charter.net = [mailto:camelot.homes@charter.net] > > Sent: Wednesday, December 12, 2001 9:16 PM > > To: canslim@lists.xmission.com > > Subject: Re: [CANSLIM] clarification > > > > > > eric, how do you get the 40% reliability of the WON breakout? = david frank > > ----- Original Message ----- > > From: "Tangen, Eric" > > To: > > Sent: Wednesday, December 12, 2001 8:57 PM > > Subject: RE: [CANSLIM] clarification > > > > > > > Of course you are right...risk is the stop value itself...it = is what you > > > loose when your stop is triggered. It is what I mean but = didn't say > > > correctly. > > > > > > This is what happens when I try to communicate math = verbally...the two > > don't > > > mix. :) > > > > > > ERIC TANGEN > > > > > > > > > > > > -----Original Message----- > > > From: John Adair [mailto:xjadair@brightok.net] > > > Sent: Wednesday, December 12, 2001 8:48 PM > > > To: canslim@lists.xmission.com > > > Subject: RE: [CANSLIM] clarification > > > > > > > > > Hi Erick > > > If I am reading your post right correctly you would say your = risk > > > on a $50 > > > stock with a $5.00 stop would be $50.00 -$5.00 or $45.00. If = that is > what > > > you are saying I would not agree I would say your risk is = $5.00 if I > > > understand what Tharp suggests. Tharp then limits your risk to = the 1% > is > > > based on that figure 1% ( 3% for the gunslinger) of your total = capitol. > > > John Adair > > > > > > -----Original Message----- > > > From: owner-canslim@lists.xmission.com > > > [mailto:owner-canslim@lists.xmission.com]On Behalf Of Tangen, = Eric > > > Sent: Wednesday, December 12, 2001 7:19 PM > > > To: 'canslim@lists.xmission.com' > > > Subject: RE: [CANSLIM] clarification > > > > > > The latter....your risk is your buy price less the stop. Rule = of thumb: > > that > > > number should be 1% or less of your total trading capital. So = if you > want > > in > > > on a more volatile stock, just buy less of it...but don't set = the stop > at > > > 7-8% if the stock has a 10% daily trading range - another = point HTMMIS > > > doesn't address. > > > > > > Trading any system with a 7-8% risk for each trade is a = receipe for > > > disaster. The pros use a 1% limit. If (as in HTMMIS suggest) = you split > up > > > your capital evenly amoung 5-6 stocks and used an arbitrary = 7-8% stop > > loss, > > > statistically, it would be very easy to get enough losing = trades to > loose > > > all your money. The unspoken 40% reliability of the WON = breakouts only > > makes > > > this bad situation worse. > > > > > > I'm afraid that a quick reading of HTMMIS gives the impression = that if > you > > > can identify the perfect C+H setup and all the other CANSLIM = criteria > are > > in > > > place, you can get darn near 100% reliability of a breakout. I = have a > big > > > problem with that. > > > > > > I'm not down on CANSLIM...just like people to know the reality = of the > > > situation. Your going for home runs here and home run hitters = have a lot > > of > > > strikeouts. > > > > > > > > > ERIC TANGEN > > > > > > -----Original Message----- > > > From: Katherine Malm [mailto:kmalm@earthlink.net] > > > Sent: Wednesday, December 12, 2001 2:02 PM > > > To: canslim@lists.xmission.com > > > Subject: Re: [CANSLIM] clarification > > > > > > > > > >>If you put 7-8% of your trading capital > > > > at risk on any one trade > > > > > > Now that I've been mulling over your comment, it begs another = question. > > Are > > > you suggesting the *total* monies invested in a trade are "at = risk"? Or > > the > > > amount which you've specified in downside stop-loss protection = as "at > > > risk."? > > > > > > Katherine > > > > > > > > > ----- Original Message ----- > > > From: "Tangen, Eric" > > > To: > > > Sent: Wednesday, December 12, 2001 1:46 PM > > > Subject: RE: [CANSLIM] clarification > > > > > > > > > > Welcome to the club! Breakouts are a high risk and high = reward > > strategy - > > > if > > > > you're batting .500, that's pretty darn good. You should = expect 40% > > > success > > > > at finding successful breakouts long-term. > > > > > > > > I just have to get this off my chest for the new = subscribers...WON's > > 7-8% > > > > stop below the pivot is a technical stop. It is a rule of = thumb based > on > > > > volatility in the handle region before a stock takes off. > > > > > > > > It is NOT A MONEY MANAGEMENT STOP!. If you put 7-8% of your = trading > > > capital > > > > at risk on any one trade, you will eventually pay some = really serious > > Wall > > > > Street tuition on the path to becoming successful trader. > > > > > > > > WON's work has virtually nothing in the area of money = management (what > > he > > > > does say is just plain outdated...by 5 stocks with = 100k...more > > appropriate > > > > to an era of high commissions and lower volatility). > > > > > > > > Tharp's books are the best (only?) work in this area and = should be > > > required > > > > reading before you head out to the great casino that is Wall = Street. > > > > > > > > ERIC TANGEN > > > > > > > > > > > > - > > > -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. > > > > > > > > > - > > > -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. > > > > > > - > > -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. >=20 >=20 > - > -To subscribe/unsubscribe, email "majordomo@xmission.com" > -In the email body, write "subscribe canslim" or > -"unsubscribe canslim". Do not use quotes in your email. >=20 >=20 >=20 - ------=_NextPart_000_002F_01C183AC.CB56C700 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
katherine, very interesting! is this = saying that=20 cups w/o handles have a better return rate than w/handles? isn't this = contrary=20 to WON's writings? how does your own personal experience relate to = this?=20 thank you, david
----- Original Message -----
From:=20 Katherine=20 Malm
Sent: Thursday, December 13, = 2001 7:10=20 AM
Subject: Re: [CANSLIM]=20 clarification

 
Norm,
 
See my notes in = bold.
 
In general, he is trying to = match the=20 formation to WON's criteria. When looking for the C&H pattern, = cups had=20 to have handles of at least one week to qualify. Handles had to be = in upper=20 half, but there were some in the study that were marginally in the = upper=20 half and included anyway. Cups had to be U shaped. No V shapes = were=20 included. (Guess he doesn't like drinking his coffee from a funnel.) = Price=20 has to have risen 30% before the cup was formed. Cup has to = take 7 to=20 65 weeks to form.
 
Thanks for relaying the interesting Bulkowski info.  Mr. B = definitely is on my coffee table list.  I have a = 'couple' of=20 questions.
 
1) "Cups with higher right lips tend to = outperform=20 those with a higher left lip."  Why would this be? = Who=20 knows? It's a mystery. But the differences were statistically=20 significant.
 
2) "Failure rate if waited for upside B/O = 5%."  Is 'upside B/O' when it goes above the left side?=20 B/O occurs when it breaks above the high of the=20 handle. Does vol play a roll here? He did not = include=20 volume as criteria for B/O because removing the = criteria hurt=20 performance, but only slightly. He = does give=20 statistics on volume at breakout and after, and the volume tends to = be very=20 high. Only 5% failure with these is surprising.  And = failure=20 is when the price falls back to the pivot? No, failure is = when the=20 price falls below the pivot and heads down. A pullback to the pivot = that=20 subsequently moves on is considered a "throwback" or pullback, and = is not=20 considered a failure.
 
This chapter alone is worth the price of the book. The = ROI=20 makes this investment a big winner.
 
Katherine
 
Norm
----- Original Message -----=20
From: "Katherine Malm" <kmalm@earthlink.net>
To: <canslim@lists.xmission.com= >
Sent: Wednesday, December 12, 2001 10:18 PM
Subject: Re: [CANSLIM] clarification

> Bulkowski (Encyclopedia of Chart Patterns) gives = statistics on C&H and cups
> w/o handles:
>
> = C&H:
> Failure rate 26%
> Failure rate if waited for = B/O 10%=20 = <<<<--------------<<<<<<<<<
>= ;=20 Average rise 38%, most likely 10-20%
> Cups with higher right = lips=20 tend to outperform those with a higher left lip.
> Avg gain = 40% vs=20 35%.
>
> C w/o H (Rounding Bottoms):
> Failure = rate=20 38%
> Failure rate if waited for upside B/O 5%=20 = <<<<---------------<<<<<<<<<
&g= t;=20 Average rise 54%, most likely 20%
>
> Nothing on flat=20 bases.
>
> Katherine
> ----- Original Message=20 -----
> From: "Tangen, Eric" <tangene@tycoelectronics.com>
>=20 To: <canslim@lists.xmission.com= >
>=20 Sent: Wednesday, December 12, 2001 9:41 PM
> Subject: RE: = [CANSLIM]=20 clarification
>
>
> > The 40% number is an = amalgam of=20 a number of anecdotes from a few different
> > sources. Its = all=20 word of mouth. No names to given protect the guilty.
> = >
>=20 > You can almost infer such a number from WON himself...I'd bet = if you=20 asked
> > the big-O-man in a seminar he'd deflect the = question to=20 point out how much
> > you are ahead having 1 big gain out = of 2-5=20 trades.
> >
> >
> > ERIC TANGEN
>=20 >
> > -----Original Message-----
> > From: camelot.homes@charter.net=20 [mailto:camelot.homes@charter.net]
> > Sent: Wednesday, = December=20 12, 2001 9:16 PM
> > To: canslim@lists.xmission.com=
>=20 > Subject: Re: [CANSLIM] clarification
> >
> = >
>=20 > eric, how do you get the 40% reliability of the WON breakout? = david=20 frank
> > ----- Original Message -----
> > From: = "Tangen,=20 Eric" <tangene@tycoelectronics.com>
>=20 > To: <canslim@lists.xmission.com= >
>=20 > Sent: Wednesday, December 12, 2001 8:57 PM
> > = Subject: RE:=20 [CANSLIM] clarification
> >
> >
> > > = Of=20 course you are right...risk is the stop value itself...it is what=20 you
> > > loose when your stop is triggered. It is what = I mean=20 but didn't say
> > > correctly.
> > = >
> >=20 > This is what happens when I try to communicate math = verbally...the=20 two
> > don't
> > > mix. :)
> > = >
>=20 > > ERIC TANGEN
> > >
> > >
> = >=20 >
> > > -----Original Message-----
> > > = From:=20 John Adair [mailto:xjadair@brightok.net]
> > > Sent: = Wednesday,=20 December 12, 2001 8:48 PM
> > > To: canslim@lists.xmission.com=
>=20 > > Subject: RE: [CANSLIM] clarification
> > = >
>=20 > >
> > > Hi Erick
> > > If I am = reading your=20 post right  correctly you would say your risk
> > > = on a=20 $50
> > > stock with a $5.00 stop would be  $50.00 = - -$5.00=20 or $45.00. If that is
> what
> > > you are = saying  I=20 would not agree I would say your risk is $5.00  if I
> = > >=20 understand what Tharp suggests. Tharp then limits your risk to  = the=20 1%
> is
> > > based on that figure 1% ( 3% for the = gunslinger) of your total  capitol.
> > > John=20 Adair
> > >
> > > -----Original = Message-----
>=20 > > From: owner-canslim@lists.xmis= sion.com
>=20 > > [mailto:owner-canslim@lists.xmission.com]On Behalf Of = Tangen,=20 Eric
> > > Sent: Wednesday, December 12, 2001 7:19 = PM
>=20 > > To: 'canslim@lists.xmission.com'=
>=20 > > Subject: RE: [CANSLIM] clarification
> > = >
>=20 > > The latter....your risk is your buy price less the stop. = Rule of=20 thumb:
> > that
> > > number should be 1% or = less of=20 your total trading capital. So if you
> want
> > = in
>=20 > > on a more volatile stock, just buy less of it...but don't = set the=20 stop
> at
> > > 7-8% if the stock has a 10% daily = trading=20 range - another point HTMMIS
> > > doesn't = address.
> >=20 >
> > > Trading any system with a 7-8% risk for each = trade is=20 a receipe for
> > > disaster. The pros use a 1% limit. = If (as in=20 HTMMIS suggest) you split
> up
> > > your capital = evenly=20 amoung 5-6 stocks and used an arbitrary 7-8% stop
> > = loss,
>=20 > > statistically, it would be very easy to get enough losing = trades=20 to
> loose
> > > all your money. The unspoken 40%=20 reliability of the WON breakouts only
> > makes
> = > >=20 this bad situation worse.
> > >
> > > I'm = afraid=20 that a quick reading of HTMMIS gives the impression that if
>=20 you
> > > can identify the perfect C+H setup and all the = other=20 CANSLIM criteria
> are
> > in
> > > = place, you=20 can get darn near 100% reliability of a breakout. I have a
>=20 big
> > > problem with that.
> > >
> = > >=20 I'm not down on CANSLIM...just like people to know the reality of=20 the
> > > situation. Your going for home runs here and = home run=20 hitters have a lot
> > of
> > > = strikeouts.
>=20 > >
> > >
> > > ERIC TANGEN
> = >=20 >
> > > -----Original Message-----
> > > = From:=20 Katherine Malm [mailto:kmalm@earthlink.net]
> > > Sent:=20 Wednesday, December 12, 2001 2:02 PM
> > > To: canslim@lists.xmission.com=
>=20 > > Subject: Re: [CANSLIM] clarification
> > = >
>=20 > >
> > > >>If you put 7-8% of your trading=20 capital
> > > > at risk on any one trade
> > = >
> > > Now that I've been mulling over your comment, = it begs=20 another question.
> > Are
> > > you suggesting = the=20 *total* monies invested in a trade are "at risk"? Or
> >=20 the
> > > amount which you've specified in downside = stop-loss=20 protection as "at
> > > risk."?
> > = >
> >=20 > Katherine
> > >
> > >
> > > = - -----=20 Original Message -----
> > > From: "Tangen, Eric" <tangene@tycoelectronics.com>
>=20 > > To: <canslim@lists.xmission.com= >
>=20 > > Sent: Wednesday, December 12, 2001 1:46 PM
> > = >=20 Subject: RE: [CANSLIM] clarification
> > >
> >=20 >
> > > > Welcome to the club! Breakouts are a = high risk=20 and high reward
> > strategy -
> > > if
> = >=20 > > you're batting .500, that's pretty darn good. You should = expect=20 40%
> > > success
> > > > at finding = successful=20 breakouts long-term.
> > > >
> > > > I = just=20 have to get this off my chest for the new = subscribers...WON's
> >=20 7-8%
> > > > stop below the pivot is a technical = stop. It is=20 a rule of thumb based
> on
> > > > volatility = in the=20 handle region before a stock takes off.
> > > = >
> >=20 > > It is NOT A MONEY MANAGEMENT STOP!. If you put 7-8% of = your=20 trading
> > > capital
> > > > at risk on = any one=20 trade, you will eventually pay some really serious
> > = Wall
>=20 > > > Street tuition on the path to becoming successful=20 trader.
> > > >
> > > > WON's work has = virtually nothing in the area of money management (what
> > = he
> > > > does say is just plain outdated...by 5 = stocks with=20 100k...more
> > appropriate
> > > > to an = era of=20 high commissions and lower volatility).
> > > = >
> >=20 > > Tharp's books are the best (only?) work in this area and = should=20 be
> > > required
> > > > reading before = you head=20 out to the great casino that is Wall Street.
> > > = >
>=20 > > > ERIC TANGEN
> > >
> > = >
> >=20 >
> > > -
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