Stage Analysis Video Training Course

Stop Loss Positioning Guide - Page 10

#73

RE: Example #1 - Abbott Laboratories (ABT)

(2020-06-21, 12:08 PM)leaf Wrote: Hi  ,   isa   , you did a  Great work !  
          
  In  Example #1 - Abbott Laboratories (ABT) ,  i understand  investor's and trader's stop from your descrtion . but  i am confused by Atr distance to stops   .  
"   
 For ABT the ATR(200) was 0.809 at the time of the recommendation and so:
1.87% to 3.10% ATR - Trader stop range
3.72% to 4.96% ATR - Investor stop range  
"  
   how do you get 
  "1.87% to 3.10% ATR - Trader stop range
 3.72% to 4.96% ATR - Investor stop range  
 
 could you give me more detailed information about this ?

I was trying to see the typical distances that Stan was using for his stop losses based on the Average True Range. So I used the 200 dya ATR to measure each stop loss he gave to get a rough idea.

So in the example above where it says 1.87% to 3.10% ATR - Trader stop range. That means that the stop loss range given was 1.87x to 3.10x the 200 day ATR value at the time. which was 0.809.

1.87 x 0.809 = 1.51283
3.10 x 0.809 = 2.5079

Therefore as he recommended a buy zone of 56-57 and a Trader Stop Loss of 54.49
56 - 1.51283 = 54.49 (so this was 1.87x the 200 day ATR from the lower end of the buy zone)
57 - 2.5079 = 54.49 (and this was 3.10x the 200 day ATR from the upper end of the buy zone)

I hope that helps

isatrader

Fate does not always let you fix the tuition fee. She delivers the educational wallop and presents her own bill - Reminiscences of a Stock Operator.
Reply
#74

RE: Example #1 - Abbott Laboratories (ABT)

(2020-06-21, 12:26 PM)isatrader Wrote:
(2020-06-21, 12:08 PM)leaf Wrote: Hi  ,   isa   , you did a  Great work !  
          
  In  Example #1 - Abbott Laboratories (ABT) ,  i understand  investor's and trader's stop from your descrtion . but  i am confused by Atr distance to stops   .  
"   
 For ABT the ATR(200) was 0.809 at the time of the recommendation and so:
1.87% to 3.10% ATR - Trader stop range
3.72% to 4.96% ATR - Investor stop range  
"  
   how do you get 
  "1.87% to 3.10% ATR - Trader stop range
 3.72% to 4.96% ATR - Investor stop range  
 
 could you give me more detailed information about this ?

I was trying to see the typical distances that Stan was using for his stop losses based on the Average True Range. So I used the 200 dya ATR to measure each stop loss he gave to get a rough idea.

So in the example above where it says 1.87% to 3.10% ATR - Trader stop range. That means that the stop loss range given was 1.87x to 3.10x the 200 day ATR value at the time. which was 0.809.

1.87 x 0.809 = 1.51283
3.10 x 0.809 = 2.5079

Therefore as he recommended a buy zone of 56-57 and a Trader Stop Loss of 54.49
56 - 1.51283 = 54.49 (so this was 1.87x the 200 day ATR from the lower end of the buy zone)
57 - 2.5079 = 54.49 (and this was 3.10x the 200 day ATR from the upper end of the buy zone)

I hope that helps

   Thanks . 

  I plan to go throuth all these stop loss examples .  and perhaps  I  can discuss them later .

Reply
#75

RE: Example #1 - Abbott Laboratories (ABT)

(2020-06-21, 05:04 PM)leaf Wrote:  I plan to go through all these stop loss examples .  and perhaps  I  can discuss them later .

As a rough guide, trader sell stops generally go below the 50 day MA and the most recent daily swing low, and are generally not more than 10% from the entry point, but more often 5% to 8% range in mid cap stocks (>$20) and larger. Whereas investor stops generally go below the 30 week MA and the most recent weekly swing low and so can be quite far away as they are meant to give the stock much more room.

isatrader

Fate does not always let you fix the tuition fee. She delivers the educational wallop and presents her own bill - Reminiscences of a Stock Operator.
Reply
#76

RE: Example #1 - Abbott Laboratories (ABT)

(2020-06-21, 05:08 PM)isatrader Wrote:
(2020-06-21, 05:04 PM)leaf Wrote:  I plan to go through all these stop loss examples .  and perhaps  I  can discuss them later .

As a rough guide, trader sell stops generally go below the 50 day MA and the most recent daily swing low, and are generally not more than 10% from the entry point, but more often 5% to 8% range in mid cap stocks (>$20) and larger. Whereas investor stops generally go below the 30 week MA and the most recent weekly swing low and so can be quite far away as they are meant to give the stock much more room.

     Thanks again for your patience .  I found  that you had answerd the "% atr issue " couple of times when 
I  finished this thread .  

     I noticed , just as you say , as an investor  you must torlarate much more pulling back compared with a trader  . hence   you must set a more widely stop position  . 
  
     I first read this book in 2015 , and now i begin to reread it  .    there are still some conceptions which i dont understand . I seach them in google , and it leads me here .  

    Attachment is a chart you posted before .  I have some questions 
   1)   how to find or define a swing high  ?  why X1 is not a swing high 
   2)  when you drew the chart , which one do you use in the following , the weekly high , the weekly low or the weekly close . 

    Thanks for your elaborate efforts .



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Reply
#77

RE: Example #1 - Abbott Laboratories (ABT)

(2020-07-05, 05:41 AM)leaf Wrote:
(2020-06-21, 05:08 PM)isatrader Wrote:
(2020-06-21, 05:04 PM)leaf Wrote:  I plan to go through all these stop loss examples .  and perhaps  I  can discuss them later .

As a rough guide, trader sell stops generally go below the 50 day MA and the most recent daily swing low, and are generally not more than 10% from the entry point, but more often 5% to 8% range in mid cap stocks (>$20) and larger. Whereas investor stops generally go below the 30 week MA and the most recent weekly swing low and so can be quite far away as they are meant to give the stock much more room.

     Thanks again for your patience .  I found  that you had answerd the "% atr issue " couple of times when 
I  finished this thread .  

     I noticed , just as you say , as an investor  you must torlarate much more pulling back compared with a trader  . hence   you must set a more widely stop position  . 
  
     I first read this book in 2015 , and now i begin to reread it  .    there are still some conceptions which i dont understand . I seach them in google , and it leads me here .  

    Attachment is a chart you posted before .  I have some questions 
   1)   how to find or define a swing high  ?  why X1 is not a swing high 
   2)  when you drew the chart , which one do you use in the following , the weekly high , the weekly low or the weekly close . 

    Thanks for your elaborate efforts .
Hi Leaf, I'll try and answer these questions for you if i can..
lets start with the easiest, thats your second question. the chart would have been drawn using the weekly closing prices. thats typical if you are only seeing the points. noone would draw the prices using the high or low. its often said that the most important price is where it closed. Hope that clears up that one.

your first question is a great one. however you may not like the answer  Confused
Firstly, not every retracement constitutes a swing, the reason being is that if we looked at every minor movement we'd be in and out of a trend so many times..remember a trend is a series of higher highs, higher lows. here we're referring to higher swing highs, higher swing lows
for this reason we try to consider only more substantial highs or lows. we're looking for those that have pulled back towards the moving average. however there is no strict definition unfortunately. if it helps..
some people use a number of candles. Gann himself declared a swing as one where 2 or 3 candles have gone lower that the previous and when that happens, the swing has taken place.
some people use a percentage by which it has retraced, anything less than say 2% is not worthy of consideration
some also uses a break of the previous x bars ago
Stan, uses a retracement that has come far enough back towards the MA

personally, I've used a second MA, a faster one than the 30 (the 10 isnt a bad one) whereby if price comes back as far as the 10, then its a swing.. this does depend on what you are looking at of course, and like anything is not 100% but its a very very good way of objectively defining what constitutes your retracement
if you were using the trader method, then clearly the 10 isnt appropriate, so you could use the 5 for example. Try it, post a second MA and use that to determine a far enough pullback
I've also looked at Gann's and either one works very very well. I tend to now just observe, and judge on its own merit. a red (or down candle) on its own you would think is insufficient, but what if that one candle took out the last 3. alas there is no one rule fits all

hopefully that explains why some shorter retracements aren't worthy of consideration, and hopefully gives you a way of being able to measure them yourself without having to get a ruler!
you could also, like i say, take a look at gann swing highs/swing lows and how he had defined them. another good starting point.
nothing works 100%, not even gann's but each one has their own merits
hope these help

Reply
#78

RE: Example #1 - Abbott Laboratories (ABT)

(2020-07-05, 10:23 AM)malaguti Wrote:
(2020-07-05, 05:41 AM)leaf Wrote:
(2020-06-21, 05:08 PM)isatrader Wrote:
(2020-06-21, 05:04 PM)leaf Wrote:  I plan to go through all these stop loss examples .  and perhaps  I  can discuss them later .

As a rough guide, trader sell stops generally go below the 50 day MA and the most recent daily swing low, and are generally not more than 10% from the entry point, but more often 5% to 8% range in mid cap stocks (>$20) and larger. Whereas investor stops generally go below the 30 week MA and the most recent weekly swing low and so can be quite far away as they are meant to give the stock much more room.

     Thanks again for your patience .  I found  that you had answerd the "% atr issue " couple of times when 
I  finished this thread .  

     I noticed , just as you say , as an investor  you must torlarate much more pulling back compared with a trader  . hence   you must set a more widely stop position  . 
  
     I first read this book in 2015 , and now i begin to reread it  .    there are still some conceptions which i dont understand . I seach them in google , and it leads me here .  

    Attachment is a chart you posted before .  I have some questions 
   1)   how to find or define a swing high  ?  why X1 is not a swing high 
   2)  when you drew the chart , which one do you use in the following , the weekly high , the weekly low or the weekly close . 

    Thanks for your elaborate efforts .
Hi Leaf, I'll try and answer these questions for you if i can..
lets start with the easiest, thats your second question. the chart would have been drawn using the weekly closing prices. thats typical if you are only seeing the points. noone would draw the prices using the high or low. its often said that the most important price is where it closed. Hope that clears up that one.

your first question is a great one. however you may not like the answer  Confused
Firstly, not every retracement constitutes a swing, the reason being is that if we looked at every minor movement we'd be in and out of a trend so many times..remember a trend is a series of higher highs, higher lows. here we're referring to higher swing highs, higher swing lows
for this reason we try to consider only more substantial highs or lows. we're looking for those that have pulled back towards the moving average. however there is no strict definition unfortunately. if it helps..
some people use a number of candles. Gann himself declared a swing as one where 2 or 3 candles have gone lower that the previous and when that happens, the swing has taken place.
some people use a percentage by which it has retraced, anything less than say 2% is not worthy of consideration
some also uses a break of the previous x bars ago
Stan, uses a retracement that has come far enough back towards the MA

personally, I've used a second MA, a faster one than the 30 (the 10 isnt a bad one) whereby if price comes back as far as the 10, then its a swing.. this does depend on what you are looking at of course, and like anything is not 100% but its a very very good way of objectively defining what constitutes your retracement
if you were using the trader method, then clearly the 10 isnt appropriate, so you could use the 5 for example. Try it, post a second MA and use that to determine a far enough pullback
I've also looked at Gann's and either one works very very well. I tend to now just observe, and judge on its own merit. a red (or down candle) on its own you would think is insufficient, but what if that one candle took out the last 3. alas there is no one rule fits all

hopefully that explains why some shorter retracements aren't worthy of consideration, and hopefully gives you a way of being able to measure them yourself without having to get a ruler!
you could also, like i say, take a look at gann swing highs/swing lows and how he had defined them. another good starting point.
nothing works 100%, not even gann's but each one has their own merits
hope these help


 Hi ,  malaguti

   thanks for ur reply .  
  
        I heard about the  " 2 or 3 candles "  , that means it need at least two or three weeks in weekly chart to form a swing high .   

       I do think , using atr to set stop positions sounds more reasonable  compared with the original way described in stan's book . 
      so , i will try it .  and now , i just want to trade as an investor .  

      I am glad to find a place to discuss stan's method . 
     
       Btw ,  I am not a native english speaker ,  please forgive me for my poor english .

Reply
#79
(This post was last modified: 2020-07-09, 05:53 PM by malaguti. Edit Reason: gann hilo )

RE: Example #1 - Abbott Laboratories (ABT)

(2020-07-08, 02:51 PM)leaf Wrote:
(2020-07-05, 10:23 AM)malaguti Wrote:
(2020-07-05, 05:41 AM)leaf Wrote:
(2020-06-21, 05:08 PM)isatrader Wrote:
(2020-06-21, 05:04 PM)leaf Wrote:  I plan to go through all these stop loss examples .  and perhaps  I  can discuss them later .

As a rough guide, trader sell stops generally go below the 50 day MA and the most recent daily swing low, and are generally not more than 10% from the entry point, but more often 5% to 8% range in mid cap stocks (>$20) and larger. Whereas investor stops generally go below the 30 week MA and the most recent weekly swing low and so can be quite far away as they are meant to give the stock much more room.

     Thanks again for your patience .  I found  that you had answerd the "% atr issue " couple of times when 
I  finished this thread .  

     I noticed , just as you say , as an investor  you must torlarate much more pulling back compared with a trader  . hence   you must set a more widely stop position  . 
  
     I first read this book in 2015 , and now i begin to reread it  .    there are still some conceptions which i dont understand . I seach them in google , and it leads me here .  

    Attachment is a chart you posted before .  I have some questions 
   1)   how to find or define a swing high  ?  why X1 is not a swing high 
   2)  when you drew the chart , which one do you use in the following , the weekly high , the weekly low or the weekly close . 

    Thanks for your elaborate efforts .
Hi Leaf, I'll try and answer these questions for you if i can..
lets start with the easiest, thats your second question. the chart would have been drawn using the weekly closing prices. thats typical if you are only seeing the points. noone would draw the prices using the high or low. its often said that the most important price is where it closed. Hope that clears up that one.

your first question is a great one. however you may not like the answer  Confused
Firstly, not every retracement constitutes a swing, the reason being is that if we looked at every minor movement we'd be in and out of a trend so many times..remember a trend is a series of higher highs, higher lows. here we're referring to higher swing highs, higher swing lows
for this reason we try to consider only more substantial highs or lows. we're looking for those that have pulled back towards the moving average. however there is no strict definition unfortunately. if it helps..
some people use a number of candles. Gann himself declared a swing as one where 2 or 3 candles have gone lower that the previous and when that happens, the swing has taken place.
some people use a percentage by which it has retraced, anything less than say 2% is not worthy of consideration
some also uses a break of the previous x bars ago
Stan, uses a retracement that has come far enough back towards the MA

personally, I've used a second MA, a faster one than the 30 (the 10 isnt a bad one) whereby if price comes back as far as the 10, then its a swing.. this does depend on what you are looking at of course, and like anything is not 100% but its a very very good way of objectively defining what constitutes your retracement
if you were using the trader method, then clearly the 10 isnt appropriate, so you could use the 5 for example. Try it, post a second MA and use that to determine a far enough pullback
I've also looked at Gann's and either one works very very well. I tend to now just observe, and judge on its own merit. a red (or down candle) on its own you would think is insufficient, but what if that one candle took out the last 3. alas there is no one rule fits all

hopefully that explains why some shorter retracements aren't worthy of consideration, and hopefully gives you a way of being able to measure them yourself without having to get a ruler!
you could also, like i say, take a look at gann swing highs/swing lows and how he had defined them. another good starting point.
nothing works 100%, not even gann's but each one has their own merits
hope these help


 Hi ,  malaguti

   thanks for ur reply .  
  
        I heard about the  " 2 or 3 candles "  , that means it need at least two or three weeks in weekly chart to form a swing high .   

       I do think , using atr to set stop positions sounds more reasonable  compared with the original way described in stan's book . 
      so , i will try it .  and now , i just want to trade as an investor .  

      I am glad to find a place to discuss stan's method . 
     
       Btw ,  I am not a native english speaker ,  please forgive me for my poor english .

your English is fine, and good luck!
I agree with the ATR trailing stop. I have found that the distance between price and the MA can often be far more than my desired tolerance.
there was one other way which again is similar to the others, and its called the Gann hilo indicator which uses the moving average of the last 3 lows (a break to signal a swing high) and the last 3 highs where a break determines a swing low
a really good indicator i found to determine swings. worth checking out

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#80

RE: Stop Loss Positioning Guide

Hello, Isa,

I'm only up to expample 7, but so far every one has not had the above average, let alone 2 times the average, volume on the weekly chart. It seems like Weinstein stressed the volume a lot in the book, and you are very quick to point it out in the Udemy course. Has there been some change in the strategy (simply from the investor side on weekly charts), as to how big a roll volume plays in defining a breakout? I understand that once you're "in the game" the rules tend to change a bit, so I thought I'd ask about that before I get "in the game." :-)

Thanks!

Tom

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