Thursday, November 1, 2007

Gunning It

Picked 100 SWHC and 100 RGR as they both were screened on the RSI(2)<2.

Both sold off this morning, but found some quick support.


Stopped out of both trades for small losses. Note to self: This strategy is bound to work better when overall market conditions are more stable than they are today. Also, I may add a component to the screen which requires the RSI(2)<2 and then a bounce before entering.


jeffpaz said...

I can't believe how many positions you have open!

Woodshedder said...

Crazy, isn't it? For the past 4 years, I have been limiting myself to about 5 positions. While that has worked well in the past, this year I've been getting killed doing it as some of my largest positions miss earnings, get downgraded, etc.

So I've been watching how others do it, and most diversify. I'm trying that out, and liking it. Although I don't get the huge portfolio boost when one shoots up 10% in a day, I can also not worry when I'm at work and can't get any time to get logged in a look at things.

Look at iio's blog. Stocklogic in my blogroll. He's diversified and kicks butt.

Anonymous said...

As the sage one said from the Stockbee blog, diversification is when you want to preserve wealth. Concentration is when you want to accumulate wealth.

With regards, to the RSI 2 strategy, I think that would work better when you are buying near or at support like the IMA trade which I'm kicking myself for not buying at the open yesterday. RGR and SWHC would be in the "trying to catch a falling knife" variety.

Anonymous said...

Guns kill people.

Dogwood said...

But sometimes they deserve it.

Anonymous said...

I was serious when I said this on your other RSI(2) thread.

You need to wait for the stock to go positive intraday after hitting the filter before entering.

They can drag RSI2<2 for days and never hit a green hold BUT when they do hold green.....

IIO said...

Woodshedder, thanks for the flattering plug. I was wondering why I started getting comments.

For some reason diversification seems to have a bad rap as some people think that it is only suited for people with bad stock picking skills and old grandmas.

Woodshedder said...

Anon, I did some quick backtesting of that filter in stockfetcher, and while it was profitable, there were some things I didn't like about the results. What exactly, I can't remember. It was quick. But it left me with the feeling that I could tweak it to better suit what I'm looking for.

I also agree that the strategy will work better with stocks on a normal pullback rather than the falling knife.

IIO- no problem. You're making bank and your blog looks cool.