I'm having a dilemma about the Current Holdings table. The original purpose of this blog was to share a bit of the chart research I do each night. That's tickers, entries and initial exits. But initial exits can't stay at that level forever; they need to move up to lock in profit, and so I created the Current Holdings table with my suggested sell-stops. Thing is, in reality I've been selling discretionarily in this market. I haven't been letting the stocks move against me very much. A bit of an itchy trigger finger. For example, I mentioned my purchase of KRY yesterday. If you look at the chart of KRY it doesn't look like I'm doing that well. But after getting in at 0.94 Thursday I sold 1/3 Thursday and the balance Friday at prices that weren't near my formal stops of 0.71 and 0.94. I fear that the Current Holdings table is implying a different exit strategy than the one I'm actually using, which I would describe as nimble and impatient. For example, this morning I started out with 8 full positions from the prior session and by the end of the day I had 1 full position and 2 half positions, with only 1 of those original 8 having been sold on a bona fide stop-out.
My unwillingness to bear risk for long is a function of the transitioning market environment we're in, where a trend can't last three sessions. As a result I'm looking for stocks to go up or they're out, and I'm treating all my holdings with suspicion. Once the market picks a direction, this will change. But for now, I fear that providing just a formal sell-stop for each holding is actually hurting more than it's helping all of you, since a strategy of proactive selling has been working better for me than a strategy of patience. So I'm going to add a guideline that provides additional criteria on when I would consider an exit. I'll continue to consider the position a Current Holding until the sell-stop is actually breached, just to be fair.
It must be emphasized that in a trending market, this squishy exit strategy is a ticket to mediocre returns. But different market conditions require different trading systems, as I mention in How To Trade My System.
| Current Holdings | ||||||
|---|---|---|---|---|---|---|
| Ticker | Entry Price |
Closing Price |
Perf. | Sell-Stop | Additional Exit Guideline | Chart |
| VISN | 20.01 | 18.69 | -6.6% | 18.11 | We want to see evidence that the correction from the 20.01 high is complete. Consider dumping if it isn't around 19.20 or higher by 1PM ET. If it clears 19.65, new stop at 18.49. | Chart |
I also wanted to experiment with giving up to two signals each day, and making sure they're signals I like rather than carrying over the ones from the day before just cuz they're still valid. Valid doesn't mean I like them very much! The blog's only been around for a week, so it's natural that things'll be shaken up!
| Ticker | Entry | Exit A | Exit C | Chart |
|---|---|---|---|---|
| MHK | 69.16 | 66.27 | 65.57 | Chart |
| EGO | 8.11 | 7.67 | 7.23 | Chart |
For MHK, consider selling 1/4 - 1/3 if it gets to the 200-day moving average of 72.36
Please refer to "How To Trade The Ideas" (right-hand side) to read this table.
No comments:
Post a Comment