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Hey guys, what to you think about setting a trailing stop buy order to catch an eventual rally in stock price, is that a good strategy ?

Agreed that the trailing amt should be large enough to not be activated by volatility or dead cat bounce, which also means I'll miss the beginning of the rally which is ok with me.

If so what would you consider being a good amount (%) in these times for lets say blue chips like major utils or telcos.

Thaks for your input !
 

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Hey guys, what to you think about setting a trailing stop buy order to catch an eventual rally in stock price, is that a good strategy ?
I don't really like to let a machine make a trading decision for me. There are so many variables in times like this that you should be present to make the call yourself. This is assuming the software will even work and you won't get passed by in a volatile market. How many times have I read that trailing stops didn't get triggered for whatever reason.

Rallies aren't usually as aggressive as pullbacks, so if you're a bit late to the game, it's better that you are there to decide.

I vote no.

ltr
 

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Hey guys, what to you think about setting a trailing stop buy order to catch an eventual rally in stock price, is that a good strategy ?

Agreed that the trailing amt should be large enough to not be activated by volatility or dead cat bounce, which also means I'll miss the beginning of the rally which is ok with me.

If so what would you consider being a good amount (%) in these times for lets say blue chips like major utils or telcos.

Thaks for your input !
Using a buy stop based on price structure & fib relationships of the waves with in the price structure will give you an edge if you know what your doing. Using arbitrary percentages is gambling. Technical indicators must be adjusted to the size of the fractal pattern & the type of pattern that is being played.
 

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Discussion Starter #4
thx guys, two comments at both ends of the spectrum. I'm not a technical analyst so percentages are based on my personal risk tolerance. for example I set a cascade of buy orders at different trailing % all above 10% because I think its a psychological barrier and also because intraday variability for blue chip stocks seem <10% for now. That way hopefully they dont activate unless its picking up for real.

thx for comments as always
 

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I got a buy signal in TQQQ on Friday and took a very small position even though I don't believe the bear is over. I feel obliged to follow the system I have laid out. Last time I failed to take a signal was October and I missed a hell of a run up. I have a tight stop so, not much to lose.
 

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thx guys, two comments at both ends of the spectrum. I'm not a technical analyst so percentages are based on my personal risk tolerance. for example I set a cascade of buy orders at different trailing % all above 10% because I think its a psychological barrier and also because intraday variability for blue chip stocks seem <10% for now. That way hopefully they dont activate unless its picking up for real.

? why are u giving the power away?

these could be few-times-in-a-century prices for blue chips ... or prices could still trend lower, which is my personal call.

but either way the action that counts is a simple buy order. Dithering around w stop/buys, fretting about pennies here & pence there, seem like ways of saying So-I-can't-make-up-my-mind-please-make-up-my-mind-for-me


.
 

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I got a buy signal in TQQQ on Friday and took a very small position even though I don't believe the bear is over. I feel obliged to follow the system I have laid out. Last time I failed to take a signal was October and I missed a hell of a run up. I have a tight stop so, not much to lose.
Rusty I like the way your playing using TQQQ. Before the crash got started I started a thread regarding putting a lot less money on the table & use a triple leveraged ETF to reduce risk for those that wanted to play the upside. The reason being we are in the 90 year crash cycle that is due to bottom in 2022. If you only have 10% to 20% of your usual stock position size on the table & the market drops 90% a lot less money will be lost since there is less money on the table. The leveraged ETF will drop more then a none leveraged ETF though since less is on the table the loss will be smaller if the market drops 50 to 90%. If the market rallies the gains will compounded. Using deep in the money options to give positive curvature also reduces risk less money on the table.

Elliott wave International, Arch Crawford, Tim Wood, Martin Armstrong all made money on the recent crash as well as the 07 - 09 bear market, 2000 - 2002 bear market & the 1987 crash though Elliott wave International recommended their clients be out of the market in 1987 not sure if they recommended shorting the market. Tim Wood never had his market letter in 1987 though @ the time he was trading his own account & he says he did know the crash was coming.

I have subscribed to all the market letters above except only subscribed to Martin Armstrong for one month. I would say the odds are high any of these guys will give you an edge to playing this time period. None of them bat 100% though you might find one that fits your personality to make money with.
 

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Trying to play to catch a V bottom into a panic spike low it is often better to play the down side. 55 fib days from a market high often will mark a spike down low. I have taken all my put options off the table. Though I might buy a few SPX that are far enough into April that covers 55 days out from the market top that are far enough out of the money that I can pick up for 10 cents. They will probably expire worthless though its not only if your right or wrong the risk/reward must be taken into account. Even if they expire worthless selling into the spike low the options could be worth a lot. If the market does not spike down into a spike low even better option prices will drop & will have some ammo to try from higher levels with option prices a lot cheaper.
 

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? why are u giving the power away?

these could be few-times-in-a-century prices for blue chips ... or prices could still trend lower, which is my personal call.

but either way the action that counts is a simple buy order. Dithering around w stop/buys, fretting about pennies here & pence there, seem like ways of saying So-I-can't-make-up-my-mind-please-make-up-my-mind-for-me


.
This. Does it matter if you buy BMO at $56 or $62 when it gets back to $108 in a few years? Or SU at $15 vs $17 when it gets back to $45? Those are big 10% swings but are dwarfed by the 100% upside.
 

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This. Does it matter if you buy BMO at $56 or $62 when it gets back to $108 in a few years? Or SU at $15 vs $17 when it gets back to $45? Those are big 10% swings but are dwarfed by the 100% upside.
Look further back in the charts bear markets have lasted 60 - 70 years i.e., British stocks 1720 to 1784, Transports if memory correct was about 70 years.
 

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Catching the bounce is a great idea.... Just make sure you are sticking to your allocations and just rebalancing into the dip and out of the dip.

I often think, if I take $x and buy this or that I could make a quick lift and be happy... I used to do that stuff and now I just stick to my allocation and rebalance when I think it is smart....
 

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Lonewolf I have a very tiny position in TQQQ risking way less than 1% of my account. May add to it if all goes well. Also have a few hundred shares of Johnson and Johnson and CVS Pharmacy which I bought last fall. They showed a nice gain for a while, but are now in the red. I don't plan to sell them, I figure if anybody is going to make money out of this emergency it's drug companies. Meanwhile keeping my powder dry and planning on buying dividend stocks when the crisis starts to let up and the market turns up a bit. I don't think I can pick the bottom but hope to do some buying after the bottom is in.
 

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I did about 30 trades last week,,,,maybe 5 trades got missed because of the stops got missed,better to do your own

good luck
 

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most bear markets last roughly 12 months to 2-3 years. Bull markets on the other hand tend to last more than twice as long, time-wise.

it's true there have been ultrafast crashes w fast recovery like 1987, but generally the bull market that follows the bear creeps itself upwards at a snail's pace. It has to climb the wall of worry, as the saying goes.

we're only in month numero uno of the bear. Just, um, mentioning in passing ...
 

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Leaving aside new money, personally I don't like this idea of constant rebalancing. For example if someone was 50/50 and wanted to stick to the allocation, they might be tempted to keep rebalancing. Perhaps every week through this crash, they would sell some bonds, buy more stocks.

While I agree that new money should be deployed to the target allocations, I'm not sure it's a good idea for existing money to be continuously rebalanced that way.

First, it seems like too many trades. And with such wide bid/ask spreads during the current market turmoil, each trade incurs significant (but hidden) trading costs due to the spread. So these are expensive trades; far more expensive than the $9.99 you see directly.

Second and more importantly, my own studies on asset allocation show that the significant benefits come from rebalancing large changes in the asset weights. I think you actually want to ride the momentum effect for a while to let the allocation weights move significantly away from their targets. For example, rebalance at 6 or 12 month intervals, to let momentum take the different assets along their different ways for a while.

Personally I am rebalancing once a year in December.

For example my targets are 20/30/50 which is gold/stocks/bonds, and today I'm at 21/26/53. So yes instead of my 30% target weight in stocks, I'm down to 26% and I'm a bit overweight bonds. I'm not taking any rebalancing action at all.

The big juicy opportunity emerges when the weights move farther off target. To let that happen, you have to avoid rebalancing too frequently. That's when you truly get to "buy low, sell high".
 

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most bear markets last roughly 12 months to 2-3 years. Bull markets on the other hand tend to last more than twice as long, time-wise.

it's true there have been ultrafast crashes w fast recovery like 1987, but generally the bull market that follows the bear creeps itself upwards at a snail's pace. It has to climb the wall of worry, as the saying goes.

we're only in month numero uno of the bear. Just, um, mentioning in passing ...
I think this is correct. It is wishful thinking that we are close to bottoming out. The initial panic may pass, but the reality of massive hit to GDP, profits, debts will become apparent. Definitely not yet priced in. Many people are still thinking 'weeks'. We are talking 'months' to a year of heavy economic disruption. The big projects at work with European contractors are probably going to be delayed by 6 months, minimum is my guess.
 

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Leaving aside new money, personally I don't like this idea of constant rebalancing. For example if someone was 50/50 and wanted to stick to the allocation, they might be tempted to keep rebalancing. Perhaps every week through this crash, they would sell some bonds, buy more stocks.

While I agree that new money should be deployed to the target allocations, I'm not sure it's a good idea for existing money to be continuously rebalanced that way.

First, it seems like too many trades. And with such wide bid/ask spreads during the current market turmoil, each trade incurs significant (but hidden) trading costs due to the spread. So these are expensive trades; far more expensive than the $9.99 you see directly.

Second and more importantly, my own studies on asset allocation show that the significant benefits come from rebalancing large changes in the asset weights. I think you actually want to ride the momentum effect for a while to let the allocation weights move significantly away from their targets. For example, rebalance at 6 or 12 month intervals, to let momentum take the different assets along their different ways for a while.

Personally I am rebalancing once a year in December.

For example my targets are 20/30/50 which is gold/stocks/bonds, and today I'm at 21/26/53. So yes instead of my 30% target weight in stocks, I'm down to 26% and I'm a bit overweight bonds. I'm not taking any rebalancing action at all.

The big juicy opportunity emerges when the weights move farther off target. To let that happen, you have to avoid rebalancing too frequently. That's when you truly get to "buy low, sell high".
If rebalancing, is it better to do so in January? Because selling winners to buy losers generally triggers CG, doing so in January gives you longest lead time to pay taxes.
 

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If rebalancing, is it better to do so in January? Because selling winners to buy losers generally triggers CG, doing so in January gives you longest lead time to pay taxes.
I've actually been choosing between Dec and Jan based on which works best for my tax plans of the year. My most recent rebalancing was executed across Dec & Jan, because I waited for 2020 to trigger a large capital gain.

I'm just squinting and calling it "December rebalancing"
 

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I think this is correct. It is wishful thinking that we are close to bottoming out. The initial panic may pass, but the reality of massive hit to GDP, profits, debts will become apparent. Definitely not yet priced in. Many people are still thinking 'weeks'. We are talking 'months' to a year of heavy economic disruption. The big projects at work with European contractors are probably going to be delayed by 6 months, minimum is my guess.
Potential global financial crisis too and maybe even some bank failures. A huge number of people no longer have income and defaults could rise very significantly. On top of that, the corporate debt bubble has burst and we have not yet began to see the fallout from that.

This is all happening so fast, and I think side effects are still coming. The corporate lending market only started freezing up last week so this is a brand new issue.

It's going to hit the banks hard, IMO
 

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I think we see S&P under 1000 here. How can we say S&P is 40% or whatever off and say it's a good deal. Base comparison needs to be 667 for S&P low in 2008 as this will be an event like that. Hell could be multiples off that so could see S&P below 500.
 
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