Questions and Answers

[hooligan]

Figure I'd start this thread since there isn't one yet.

There are no stupid questions. Or there are, but don't be a coward. Either way, ask away.

[hooligan]

couple of mine:

1) Is there a ballpark default stop loss % for plays when one isn't mentioned? Tricky thing I suppose, given varying volatilities ... How do other members go about this ... I may have missed this in the basic material, not sure.

2) Why exactly do we report fills? I get one purpose which is to establish an entry range for the newsletter to jump off. Any other reason? Specifically with options, does it matter more?

[Eric]

1) Personally, I don't like Stop-LOSSES... that's just locking in losses. (Warren Buffett "Rule No. 1: Never lose money. Rule No. 2: Never forget rule No. 1.") I'm more inclined to ride a stock to zero rather than lock in a 60% loss. I do set stops that protect profit once a trade is well into profit territory.

2) Reporting fills is important on all plays but 10x more important on options. Sol does not assume option fills. If nobody reports opening an option position it is assumed nobody opened that position and the play may be removed from the newsletter. Secondly, options generally have wider swings than stocks and wider bid-ask spreads so having multiple fills reported gives a better picture of what a fair price for that option might be. I find the TI cost-basis very helpful to get into option plays that I may have missed initially but I am interested in. Sometimes you can get into an option within the reported fills range even if the trigger is not currently activated.

[AstuteShift]

For the first question, it really depends on your risk tolerance as a trader or investor

I personally don’t wait for SOL to get out or take profits, sometimes I roll the profits or carry it to another trade, this is more on my option portfolio

For stocks, I recommend picking the ones you like, that are the main or green plays. Ride the trend until SOL says it’s time to get out.

However, my main portfolio I wait until the main trend turns bearish. This is my etf portfolio. This is more advanced since it really pushes your limit on patience and having the trend as your friend until the end

My option portfolio, get out if it reaches below the 6 month mark of holding or at 50-60 percent loss. You can’t win them all but usually the winners overtake the small losers thanks to portfolio management and not risking more money on one particular trade on options

The second question is answered by Eric pretty well.

[viptikk]

I am new to TI, so I had a few questions:

1) For most of the plays, generally 1st lot buy is at a higher price and then it follows with 2 lower buying ranges, so if we think the stock is going to go down then why buy at a higher price? And if we think the stock is going to go up, then do we end up just buying the 1st lot as we may never see the price go down for the 2nd or 3rd lot buying range.

2) Some of the plays have been sold in loss, so are those stocks worth it to buy in at those stop-loss point , if I have not bought any of it earlier. To clarify further, are all the stocks in these plays solid with their fundamentals, and should they go higher at some point, or is it, if they have reached stop-loss point then there is no scope of them recovering in short term.

[Pipedream]

I am new to TI, so I had a few questions:

1) For most of the plays, generally 1st lot buy is at a higher price and then it follows with 2 lower buying ranges, so if we think the stock is going to go down then why buy at a higher price? And if we think the stock is going to go up, then do we end up just buying the 1st lot as we may never see the price go down for the 2nd or 3rd lot buying range.

2) Some of the plays have been sold in loss, so are those stocks worth it to buy in at those stop-loss point , if I have not bought any of it earlier. To clarify further, are all the stocks in these plays solid with their fundamentals, and should they go higher at some point, or is it, if they have reached stop-loss point then there is no scope of them recovering in short term.

It might help you decide what to do if you find and read the wealth of material Sol has provided so you can learn more about stock trading before you risk any of your funds.

[Eric]

I am new to TI, so I had a few questions:

1) For most of the plays, generally 1st lot buy is at a higher price and then it follows with 2 lower buying ranges, so if we think the stock is going to go down then why buy at a higher price? And if we think the stock is going to go up, then do we end up just buying the 1st lot as we may never see the price go down for the 2nd or 3rd lot buying range.

2) Some of the plays have been sold in loss, so are those stocks worth it to buy in at those stop-loss point , if I have not bought any of it earlier. To clarify further, are all the stocks in these plays solid with their fundamentals, and should they go higher at some point, or is it, if they have reached stop-loss point then there is no scope of them recovering in short term.

First off, we all pay TI for guidance. What we do with that guidance is personal to each of us. Your strategies & rules will change over time (if you're learning anything). Sol likes to point out that we are all students, it's just that some are more advanced students. As an investor/trader I went from kindergarten through second grade in about 3 years on my own and from 3rd grade to 11th grade in about 2 years of subscribing to TI-MU service.

1) You'll notice none of the plays are issued at today's market price. We (as a group/club/whatever) only buy if it "goes on sale". Sol isn't forecasting that a stock will probably go down to $10; he's saying "XYZ is $25 today, I think it's a buy at $20, if it goes down to $15 buy more because that's a good deal, if it goes down to $10 buy even more because that's a SCREAMIN' DEAL...if it goes to $6 try to get some of your money back because we might have an ENRON situation here.

2) They might be a buy at the stop price (especially if the stop price is triggered by a COVID-CRASH)...you better have an idea why it crashed and do your own homework on the fundamentals. I have ignored Sol's stop orders to my benefit and to my detriment depending on the stock.

[bpcw]

Sol, with Brexit in mind, what do you think of the prospect of investing in the UK stock market, perhaps via an ETF index tracker?

The UK has lagged badly the recovery in US stocks since the end of March and for a long time in fact?

[SOL]

One could make the argument that EWU looks pretty decent, and EWUS is not too shabby to as our indicators are in the neutral range (neither oversold or overbought), it also pays a dividend. But the patterns are not as complelling as some of other plays.

[bpcw]

One could make the argument that EWU looks pretty decent, and EWUS is not too shabby to as our indicators are in the neutral range (neither oversold or overbought), it also pays a dividend. But the patterns are not as complelling as some of other plays.

Thanks Sol for your speedy response!

[mani]

Hi Sol,

With today's drop and your previous comments on a drop - we should assume we need not sell as if the uptrend was lower there would have been an advice from your side to cut positions, right?

[SOL]

at this stage of the game, one should start getting used to 1K moves to the downside, the reason being that even 1K move to the downside in one day is a non-event.

[mani]

Ok thanks Sol

[Triplethought]

Sol, if we are slowly getting out of options (on the assumption a correction may be on the horizon), why do we have orders to buy two new options (BSX and USAK), both of which have been massive losses for us. and one of which (USAK) only has until April (4 MONTHS) to hit a strike price that seems unlikely based on recent history? These plays seem counterintuitive. Thanks in advance.

[Triplethought]

Vanguard doesn't allow me to have both a "stop" price and a "Limit price" on a stock at the same time, giving an error that this could result in a short if both orders executed. Sol has issued several instructions to both put a stop at a lower end AND to sell if a stock hits a particular upper target.

My question is is Vanguard just LAME or does everyone else have to choose whether to issue a stop order or a limit order on these plays? It's a pain in the ass because I have to manually monitor or set alerts outside the system for one or the other.

Thanks.