[isatrader]

I have a question about the management of existent positions.

1) When market situation is changing - but only progressively - let's say we have a bull market, and some signs of weakness appear (bad A/D line, eventually breaking the MM30h, even for a moment, and so on). Let's say that the bull ratio is no more 10/10, but only 8/10. Do you prefer cut your positions, or let them being cut by the existent stoplosses ?

2) Same question for sectors. Let's say I buy a Auto&Parts stock, the sector being strong. After that, the sector indice weakens, but my stock is still going further. What would be the best solution ? Close the position ? Getting out ?

I tend to rely on the weight of evidence from the multiple breadth charts that I look at, and especially my portfolio equity curve for signs. Personally I'm not a fan of waiting for stop losses to be hit. I prefer to use the "if in doubt, get out" tactic. So for example, if I see enough bearish signs in the market breadth charts appearing and none of my positions are working anymore, and multiple breakouts attempts are failing in the market. Then I'll get out and reassess from the sidelines from an unbiased perspective. The down side is that it can cause you to get whipsawed and miss some good gains. But I'm a very cautious investor these days, as I'm trading my own pension money, so it might be a more conservative approach than most would take.