AKK to boom, page-43

(Sorry if I was being a bit narky I've just had to deal with a couple of frustrating down rampers today who appear to be game playing.)

I await their reply from a technical, fundemental, macro and announcement perspective as to why they think AKK will go down in the short term.

Anyway to answer your question: The best way to deal with the issue of stop losses is to:

1) make profits enough of the time with good entries so you do not need stop losses in the first place. Obviously timing the market using multiple technical indicators is necessary.

2) Never fall in love with a trade - it makes exiting quickly easier. There are endless trading opportunities so if you have mis-timed a trend exit and re-enter later or find something else to trade.

3) understand the difference between when a stock is languishing or if someone is making a stock appear like it is languishing in an attempt to either sucessfully short or to get a cheaper entry on large buy orders (sometimes instos do this). To work this out utilise buy vs sell volume data along with total volume and end of day sequence of sale data to see how something is moving. For example; despite the fact that some douchebag is illegally manipulating AKK's end of day SP making it look technically weaker then it actually is you can use the above elements to work out what percentage is off screen sales what percentage is on screen sales (good to use in lower liquid stocks) and then you can make a guided assumption on where the SP is heading earlier than others do. By using such data including other technical indicators I try to work out who is doing what and whether a quick exit or intestinal fortitude (going for a ride) is required.

4. Attempt to build redundancy in your entry point so you have wiggle room and you do not have to exit so quickly. For example, after entering AKK the SP hit the next upward price point giving me plenty of wiggle room if required. Once again the goal is to enter trades that are trending upwards upon entry so you do not need to think about stop losses often. If you do have to think about using a stop loss as it appears the SP does not have the sustained upward momentum first believed it is better to cut such trades swiftly.

Saying that, and using AKK as an example the buy side volumes are building which is great, there is good patience on the sell side so momentum will build so there is no thought of stop losses or getting out.

I suppose the point is if it has come to the point that I have to think about stop losses the momentum is likely long gone and the downward SP movement is simply trailing momentum indicators. Therefore, sometimes it may be volume indicators that trigger my exit before a loss through the lowering of a SP have even occured.

5. Understand common intraday movements. For example, consider whether the changes in momentum/volume and SP is normal and if it is apart of the SP's normal intraday variance. Alternatively, consider if the lack of volume/ momentum and subsequent SP drop something larger.

As you can see the way I deal and consider my exits is fairly complex and is based more on momentum and volume considerations and is not solely based on a lowering SP.

Finally, if I achieve 7 wins out of 10 averaging 5% each time with two losses of 3% and one negligible profit of 0% with 1.5 trades per week meaning the cycle is complete in 6.5 weeks my average profit is 4.5%. Lately some of my profits have been above the 5% average too so that also helps. So.... 5%x7=35%-6%=29%..... 10÷1.5 = 6.5..... 29÷6.5= 4.5% avg per week.

That doesn't include positive compounding factors either but that's too difficult to work out considering my previous tendency to fail high school maths.