I thought I would canvass the learned views of ASF members on this strategy, aimed at resolving the essential conflict between the buy/hold investor and day trader (ie. short term vs long term), that allows you to apply any stop-loss rule you want whilst still having the benefit of taking the long view. More importantly, it might allow you to continue profitable trading and eliminating losses over the longer term.
Feel free to critique it. Tear it down if you want to, because I'm not totally persuaded either. BTW - none of this helps you with picking the right stock. A dog's always going to be a dog.
This system requires you to have a personal account as well as an SMSF account.
So here goes.
Step 1. You buy a stock (easy enough).
Step 2. If the SP tanks down to a level that you would like to set a stop-loss, you do an Off Market Transfer to your SMSF (and your SMSF pays you for it at that losing price).
Step 3. If the SP goes up, sell it whenever (after 45 days for day traders, up to 45 years for buy/hold) and take the profit.
So, your personal account lives to fight another day, using the cash from the SMSF to (hopefully) find a stock that will go up rather than stick long-term with a losing trade. If at least 50% of your stock picks go up, then your capital should continue to increase.
Whilst your SMSF, by its nature, is prepared to hold on to this stock until it eventually turns around and makes a profit compared to when you originally bought it.
You can act like a day trader in your personal account, consign your short term losses to your SMSF (which should eventually repair itself if you picked the right stock), and make short, medium or long term profits from your personal account.
A wise man once said "If it sounds too good to be true, then it probably is". So there you have it, do your best to pick holes in it.