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Title: Year end notes Post by: bryanmcn on December 31, 2006, 11:47:28 AM Hi all
I note with interest that the Ultimate Price Momentum V4 has, to date, a success rate of 58.6%. Pretty good when you consider that some of the best stock traders rarely get better than 55%. In the books "Stock Market Wizards" and "Market Wizards" by Jack Schwager - (interviews with top traders) a common theme is to cut your losses and let your runners run. The strategy involves appropiate stop losses with adjustments as the stock rises. You can't loose more than 100% (unless your shorting) but you can gain much more than that. Deciding where to put the stop is the trick. Percentages may not be the total answer as it depends on your position size, the volitility of the stock, the resistance and support technicals etc. I have tried to make my own rules and have missed some explosive moves after being "shaken out" when a stop hit but it has also saved me from some dramatic losses. A final note is that I don't think we should ever worry about matching the portfolio's return since it is theoretical and has no cash position. We all have some cash, some time. Cash IS a position (and a wise one at times). I would like to hear what kinds of returns the members have had this last year. Any volunteers? There is a trading game on Van Tharps (one of the wizards) site http://www.iitm.com/ Has anyone tried it? |