Q: Why have there been no new buys recently?
A:
When the stock market is in sell mode, per the AlphaKing Trading Indicator, no new buys will be issued by our system until that
changes. The results shown for each stock are based on such a stock market
weighted approach.
The results were overwhelming when we tested using the stock market as a
timing tool for indivudual stocks, showing that traders are much better off
staying in cash while the stock market is in sell mode, rather than either
trying to hang onto long positions, or even seeking out stocks that are
holding up better than the market.
Our approach uses whatever works the best, and the answer is clear: Stock
market sell signal, then stay in cash....
Kevin Wilde, Chief Trading Strategist.
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Q: What is the average drawdown from the high in your sell signals?
A:
We don't know the answer to the draw-downs from the high. All tests are run
on money in the bank after the trade is closed, versus all other methods. We
have done a ton of work on trying to lock in profits sooner via tigher
signals and they make less money over time than our current approach.
A glance at the arrows on the charts of stocks shows that sometimes the AK
system sells too soon, sometimes too late, and sometimes spot on. The
current set up makes more money than all other trading methods.
Our system works on buying portfolios of great stocks when the stock market
flips into buy mode, with the view of trying to hold onto them until the
next sell signal, while letting winners run, while cutting losses on the
weaker stocks quicker.
There are 3.1 new buys for the stock market each year, on average.
We are simply focused on selling when the AlphaKing Trading Indicator is in sell mode - adding shorts
for the portfolios that trade short during the sell signal - and letting the
stock market do its thing until the next buy signal. Then we'll load up long
again. And repeat. And repeat.
I can say with some confidence that a drop of a certain percentage from a
peak will be a great ENTRY opportunity only if the stock market moves to new
highs after purchase, while the same drop for the stock will be a great EXIT
signal if the stock market flips into and stays in sell mode.
Since one never knows which dip is which, all we can do is run tests on all
dips, and all rallies, to see which set of indicators make the most money
with the least volatility overall.
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Q: Why don't you use stop orders?
A:
Stops don't work, though technical trend-following triggers do.
Think about it thusly: you enter a stock trade with about a 50-50 chance of making a profit. If you set a stop, then maybe 1/2 of your would-be winners will be stopped out, along with the other 1/2 that were destined to be failed trades. That leaves a 25% hit rate, and that is tough to overcome.
Technical trend following triggers, on the other hand, also work 50% of the time, with zippo reduction for anything other than what the trend following signal is destined to deliver on over time.
In testing, these technical trend-following triggers have approximately a 10% average loss on the failed trades, though any one trade can be significantly higher.
You can see this at work by pulling up charts on the main chart page, and looking at the average loss, then take a peek down the full trade list. diversification helps smooth some of those larger than would like to see drops.
Traders and investors can set stops with any of our positions if they like. If a position does trigger an exit signal after puirchase, it will be replaced with another pick if the stock market trend remains in place. We use the Alphaking Trading indicator - for the stock in question - to trigger exits in our positions once entered.
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