Stops

[Triplethought]

I was noticing that many of our plays don't have stops. And thinking I need to get a little more aggressive with my stops in case of volatility. I noticed this in last MU

"Funds should be divided into three equal lots and deployed one lot at a time. New notes take precedence over old notes. For conservative investors: once a stock shows gains of 30% or more, the existing stop should automatically be raised to the entry price. For example, we are long stock X at 10.00, and it is now trading at 13.00 or higher, the stop automatically moves to 10.00."

I'm wondering if you could argue, for example that with today's price of Google at $2278.35 the google stop should move up from $1450. Our Average entry price is $1300 so according to the formula the stop would only be $1300.
But....if we took 30% over THAT for example the stop might be ($1300*1.3)= $1690. Being this aggressive could mean you stop out when there is a dip and certainly SOL wouldn't advocate that.

I did a quick column add to Jlhooter's spreadsheet to do this calc and I can see several stops that could possibly be raised. Interested in Everyone's take on whether such a theoretical Stop column (perhaps with a less aggressive formula) would be useful.

[MarkD]

I have been wondering about stops as well. To me stops are not important in a bull market. There may be a time when the trend changes but crowd madness will drive prices UP not down into that signal. Maybe Sol can provide an answer.

[SOL]

I have been wondering about stops as well. To me stops are not important in a bull market. There may be a time when the trend changes but crowd madness will drive prices UP not down into that signal. Maybe Sol can provide an answer.

IF you are not risk-averse then stops should not be part of the main plan, The trend is the master stop. If the trend changes then we will introduce tight stops and then be twice as selective in using new plays. We will place stops when we deem it is necessary and that is usually when the position is showing a sizeable gain. However, individuals are free to modify our methods to suit their needs.

[jlhooter]

I was noticing that many of our plays don't have stops. And thinking I need to get a little more aggressive with my stops in case of volatility. I noticed this in last MU

"Funds should be divided into three equal lots and deployed one lot at a time. New notes take precedence over old notes. For conservative investors: once a stock shows gains of 30% or more, the existing stop should automatically be raised to the entry price. For example, we are long stock X at 10.00, and it is now trading at 13.00 or higher, the stop automatically moves to 10.00."

I'm wondering if you could argue, for example that with today's price of Google at $2278.35 the google stop should move up from $1450. Our Average entry price is $1300 so according to the formula the stop would only be $1300.
But....if we took 30% over THAT for example the stop might be ($1300*1.3)= $1690. Being this aggressive could mean you stop out when there is a dip and certainly SOL wouldn't advocate that.

I did a quick column add to Jlhooter's spreadsheet to do this calc and I can see several stops that could possibly be raised. Interested in Everyone's take on whether such a theoretical Stop column (perhaps with a less aggressive formula) would be useful.

TT,
Based on SOLs comments about each investor should set a stop based on their needs (for example let's say I want to be aggressive and not sell a stock until it is 50% over my average entry), I think the stop-setting should be up to the individual investor.
It is very easy for me to add a column and call it Desired Exit or Desired Level of profit or If Above This Level, How Far It Would Drop Before I Say Enough and Take My Profits. At the very top of this column I could have a cell that can be entered by the user where you enter a single % value and the column updates to a price that is X% above the "Avg Fill Overall" and each investor can play with this single % value based on their planned goals or for each individual position. To minimize complexity, it would be a single column that looks ONLY at the Avg Fill Overall column, which looks at the average of all average entries for each lot.

[Triplethought]

TT,
Based on SOLs comments about each investor should set a stop based on their needs (for example let's say I want to be aggressive and not sell a stock until it is 50% over my average entry), I think the stop-setting should be up to the individual investor.
It is very easy for me to add a column and call it Desired Exit or Desired Level of profit or If Above This Level, How Far It Would Drop Before I Say Enough and Take My Profits. At the very top of this column I could have a cell that can be entered by the user where you enter a single % value and the column updates to a price that is X% above the "Avg Fill Overall" and each investor can play with this single % value based on their planned goals or for each individual position. To minimize complexity, it would be a single column that looks ONLY at the Avg Fill Overall column, which looks at the average of all average entries for each lot.

jlhooter are there conditionals with one time triggers in Excel? If so it could be more sophisticated:

If Current Price <= Entry Price+30% Then suggested stop="none"
If Current price >= Entry price+30% THEN 1 time trigger "suggested Stop"=Entry Price
If Current price >= Entry price+40% THEN 1 time trigger "suggested Stop" = Entry Price +10%
If Current price >= Entry price+50% THEN 1 time trigger "suggested Stop" = Entry Price +20%

If such a thing exists a one time trigger formula would also be useful for SOL's instructions like "if it trades to $180 before you get in cancel this play". If no such thing as a one time trigger formula I suppose it could be a macro button you click on to run the formula called "suggest stops"

[jlhooter]

TT,
Based on SOLs comments about each investor should set a stop based on their needs (for example let's say I want to be aggressive and not sell a stock until it is 50% over my average entry), I think the stop-setting should be up to the individual investor.
It is very easy for me to add a column and call it Desired Exit or Desired Level of profit or If Above This Level, How Far It Would Drop Before I Say Enough and Take My Profits. At the very top of this column I could have a cell that can be entered by the user where you enter a single % value and the column updates to a price that is X% above the "Avg Fill Overall" and each investor can play with this single % value based on their planned goals or for each individual position. To minimize complexity, it would be a single column that looks ONLY at the Avg Fill Overall column, which looks at the average of all average entries for each lot.

jlhooter are there conditionals with one time triggers in Excel? If so it could be more sophisticated:

If Current Price <= Entry Price+30% Then suggested stop="none"
If Current price >= Entry price+30% THEN 1 time trigger "suggested Stop"=Entry Price
If Current price >= Entry price+40% THEN 1 time trigger "suggested Stop" = Entry Price +10%
If Current price >= Entry price+50% THEN 1 time trigger "suggested Stop" = Entry Price +20%

If such a thing exists a one time trigger formula would also be useful for SOL's instructions like "if it trades to $180 before you get in cancel this play". If no such thing as a one time trigger formula I suppose it could be a macro button you click on to run the formula called "suggest stops"

TT,
I can't do a 1-time trigger because the sheet is read-only and if not read-only, Excel can't do what you ask because the cell is active every time you open the sheet.
I can do the algorithm you suggest, showing and alternate stop based on your levels and I will add a separate column that show Price-% over Avg Overall Entry.

[SOL]

TT

One thing to keep in mind, the average investor is not a pro like you and Jlhooter. So they might find the new stuff more complex. Having said that I don't want to interfere in what appears to be an incredible Job the two of you have done. I am okay with you guys doing your thing but as I told Jlhooter don't push yourselves too hard. The key when it comes to investing is not to have great spreadsheets but to understand that investing comes down to identifying the trend and keeping a tab on your emotions

[jlhooter]

TT

One thing to keep in mind, the average investor is not a pro like you and Jlhooter. So they might find the new stuff more complex. Having said that I don't want to interfere in what appears to be an incredible Job the two of you have done. I am okay with you guys doing your thing but as I told Jlhooter don't push yourselves too hard. The key when it comes to investing is not to have great spreadsheets but to understand that investing comes down to identifying the trend and keeping a tab on your emotions

Sol I agree. I made the change suggested and have it in hidden columns and I believe changes have converged. I find it helpful like others but I have to stop and move on to learning how to be a better investor. I feel that TT and I have matched the spirit of the newsletters very accurately. Thanks everyone for your comments and suggestions.

[AstuteShift]

Incredible job you guys did, for me personally I find excel sheets cumbersome so I stick with the app StockAlarm alerts and monitor my progress with a trading journal

For the analytical trader this is extremely valuable, so kudos to you guys!