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Hi Howard.Firstly, thanks for contributing another top post, i like especially the discussion on exits.The points 2 and 3 on exits is something that im going to start working on shortly.Just one comment on what you said about trend following systems (Iv highlighted this section in your post).Dont you think that if you have a good entry, like that used in the study by Blackstar, when a stock makes an all-time high, that this would still perform well in sideways or bearish periods? (Not outstanding, but can beat the market perhaps?)A stock making an all time high in a bearmarket or sideways market is a rare find, but one that does so is likely to be a champion. Say if in a bullmarket you have 50 stocks a year making all time highs, and in a bearmarket/sideways market you have only 3-4, if your entry is good enough to identify these winners, and you set your system to enable pyramiding, then theres a good chance that you will find your portfolio full of large positions in very few (champion) stocks.The above is just my opinion, alot of it still hasnt been tested.Comments and further discussion very much appreciated.
Hi Howard.
Firstly, thanks for contributing another top post, i like especially the discussion on exits.
The points 2 and 3 on exits is something that im going to start working on shortly.
Just one comment on what you said about trend following systems (Iv highlighted this section in your post).
Dont you think that if you have a good entry, like that used in the study by Blackstar, when a stock makes an all-time high, that this would still perform well in sideways or bearish periods? (Not outstanding, but can beat the market perhaps?)
A stock making an all time high in a bearmarket or sideways market is a rare find, but one that does so is likely to be a champion. Say if in a bullmarket you have 50 stocks a year making all time highs, and in a bearmarket/sideways market you have only 3-4, if your entry is good enough to identify these winners, and you set your system to enable pyramiding, then theres a good chance that you will find your portfolio full of large positions in very few (champion) stocks.
The above is just my opinion, alot of it still hasnt been tested.
Comments and further discussion very much appreciated.
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