Are stop losses all they’re cracked up to be? That’s got to be the $20million dollar question.
I’ve been reading all about them via the Incredible Charts newsletter. Over the last three weeks, they posted 3 articles on Stop Losses – Help or Hindrance? The argument for the use of stop-loss rules seems inherently sound, yet there appears to be no real evidence that stops are providing the safety benefits that many traders expect.
This obviously generated a lot of comments on their forum. You can check it out here it is definitely food for thought. http://www.incrediblecharts.com/sitemap.php?mgroup=162
Well, we’ve been trading for 13 weeks now and the market has moved around quite considerably, over this time there have been a number of horrific natural disasters, the Aussie dollar has reached record highs, commodities have started to drop in value and there has been a general level of uncertainty in the overall market. Fun, fun, fun.
I must admit that I’ve been fairly ‘hands-off’ on my trading lately, without any real reason to jump into the market completely. My portfolio has remained the same for awhile now without any additional buying or selling.
ILU – this stock did actually break my stop loss rule and pulled back three days in a row (my rule is to exit after two consecutive stop losses). However, Id’ just been reading up on stop losses and decided to sit and see what happens. After all ILU has been on a strong uptrend and due for a slight pull-back. In this instance it paid off, as the share has continued again on the uptrend.
However, if I’d played that strategy with MND and not sold out after two consecutive stop losses, I could have lost another whole dollar on each share.
QRN is trending sideways and I’m watching closely with finger on the trigger ready to sell if it drops much more.
So I currently hold, ACR, QRN, ILU and $15k in cash.
ASX200 – down (-1.65).
My portfolio – +1.95%
Your current portfolio (live)
Portfolio total $51,015.00
National performance (at close 19/05)
National leader $56,676.71
National average $48,164.07
Your ranking (at close 19/05)
National ranking 1053 of 10334
State ranking 214 of 2136
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