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@luckylefty_expect7
ABC-137
I have a terrible history of trading. Here to learn, discuss ideas & to keep myself honest. I work in eCommerce. N.b I trade through IG index so unable to share portfolio directly on here…
36 following16 followers
Smart investing hurts sometimes…
Having jumped back into investing, I bought some of $DDOG and added a stop-loss to ensure I didn’t drop below 10%. The problem being that it’s risen since then and I still think it’s a great bet for the long term🤕

Any thoughts on 10% being an optimal level? Interested in hearing other people’s views on what level you add a stop loss.

5 days since this has been posted and no takers.
I was hoping to see others opinions on this first before I muddy up the waters, but in the absence of replies, I'll chime in.
The monitoring and management of a position is just as important as the entry. For those who choose to use stop losses, a 10% stop loss level gives a new position plenty of breathing room to absorb the day to day volatility of pretty much all stocks, while protecting from the worst of a plunging downside move because narrative of the underlying business has meaningfully changed (or the broad market is plunging).
Since I only buy stocks in an established uptrend, I find a 10% stop loss on any trade to be more than sufficient. I used to set my stop loss level to be 3 times the 14-day average true range (ATR), but after reading Mark Minervini's books, I've moved to the more simple 10% rule. As Mark says, you'll usually know a trade won't work long before the price falls as far as 10% because there'll be some sort of technical breakdown. Usually there's been a meaningful breach below a support line or you'll see a clear reversal pattern or the narrative about the underlying business has changed for the worse.
If the stock continues to trend up, I'll move the stop loss in chandelier fashion to get to break even point as fast as possible. Once the stock price is 10% above my cost price, my automatic stop loss now sits at the cost price and pretty much ensures I'm not going to lose money. I feels like I now have a "free roll", but I have to remind myself a free roll doesn't exist because I'm still tying up my precious capital in that stock position, so it's eminent to still make a healthy capital gain.
At this point I diverge from the usual "textbook" teaching of managing a trade position. I don't chandelier (increase) my stop loss level higher than my cost price, even if the stock price continues to rise. I know I won't make a loss on that position, so I want to let the stock go up as far as possible and let my winners run.
I move to a "discretionary stop", basing my exit on either a technical breach if I've bought the stock purely on technicals, or an adverse change in business thesis if I've bought to own part of the business. There's a clear delineation between the two cases simply from the amount of time I spend researching the underlying company.
For a stock I've specifically bought for trading purposes, a technical breach could be the stock price falling 3% below a rising 200-Day SMA while the broad market is still in an uptrend. Usually he rule is if the stock in an uptrend reverses direction to record a lower low, I'm out. That's the general rule that seems to cover all reversal trading patterns (head & shoulders, double top, triple top, descending triangle etc).
If I bought the stock because I want to be a fractional owner of the business, usually the breach of the 200-Day SMA is only a call to action to review my underlying business thesis. If my conviction/belief about the business has waned, then it's sold. What's most important to me in this situation is "divergence". If I still like the business, I'm less worried about my position being in correction mode if the broad market is also in correction. But a stock in a clear downtrend while the broad market is still trending up is a big red flag. If I can't find a business reason why the direction of the stock price is moving opposite to the broad market, then it's usually because I haven't looked hard enough. It can be as easy as sentiment cycling out of the industry. There's always a reason. Unlike buying a stock for trade purposes, buying a stock for business reasons requires a business reason (i.e broken business thesis) to get out of the stock.
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Michael Burry…
Chats some serious shit. This guy hopped on the bird app yesterday telling his followers “Sell”. Sell what, and on what basis? We assume he means sell stocks and not your house. And why? Did he have inside info? A data point no one else could see? No, he had nothing more than a hunch and a gut feeling because of the Jan rally and has now deleted his Twitter account (I suspect due to the vitriol hurled at him from those that followed blindly).

He may have called the financial crisis in ‘08 back in ‘05 (though someone famously said being early is the same as being wrong), but he’s also called 98 of the last 2 recessions correctly.

Let’s stop making stupid people famous. $SPY $QQQ

He's definitely an odd one. He usually deletes every tweet, and has deleted his twitter account multiple times. Many of his tweets are very cryptic like the "sell" one from yesterday. Not super helpful 😄
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I’m getting back in the market, after moving almost everything into cash.
Sold almost everything last Jan. Now I’m getting back into the market this week, about 6 weeks earlier than I’d anticipated. Recent economic data has showed the west is doing better than anticipated and interest rate hikes may not need to go much further.

A number of stocks that I think offer some great long-term value:

$GS 20% (I’ve wanted to get some Goldman for years, but never took the plunge. The smartest guys in the room and making big cuts to help their figures this year. Ruthless MFs. )
$MSFT 20% (Should have bought back in 17/18 after seeing their AI in action on Twitter. Shit was wild back then and now, with money behind ChatGPT, and a pretty resilient portfolio, they’re gonna dominate over the next decade.)
$NFLX 20% (Was oversold and has come back strongly. They’re cancelling the crap and I’m expecting their profits to only get better once advertising gets on board. Mind you, massive risk with the password sharing.)
$PLTR 20% (When these guys get positive net income, shit is going to the moon and in 20 years I’m gonna look like a genius or a total idiot.)

Looking at $DDOG next.
post media

As we enter a period of higher interest rates (not historically that high, but very high for recent times), tech is no longer the sector that it was.

The question is: what i__s the next growth sector? Does tech bounce back and we see the Fed pivot soon, or does inflation persist and 4-5% becomes the norm?

A list of the key sectors:

  • Financials
  • Utilities
  • Consumer Staples
  • Industrials
  • Materials
  • Energy
  • Real Estate
  • Consumer Discretionary
  • Communication Services
  • IT
  • Healthcare


No one wins in a bear market.
Winning = losing the least.

I'm leaning towards 4-5% inflation becoming the norm for the next 5 years.

This is why Druckenmiller is saying the next decade might be a 'lost decade' for stocks.
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$AMZN down nearly 25% after the close 🫣The era of needing big tech in your portfolio is officially over. It turns out the decade-long bull market was only because interest rates at record lows for so long. The Fed giveth and Fed taketh away. RIP 🪦

This is an absolutely nuts move for Amazon. Can't say I remember the last time Amazon fell by this much in a single day.
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It’s crazy how many times I’ve seen markets or individual stocks rally on the day of an earnings announcement, only for them to fall afterwards.

Likewise, the opposite has been true many a time, too, losing ground during the day only to rally after hours.

Rarely have I seen a rally during the day continue into after hours trading.

If only my wallet were to let me put my money where my mouth is…


Oof, both Microsoft and Google ultimately giving up 6% after hours. $MSFT looked resilient for a bit but the guidance was weak on the call.
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We’re all looking for reasons to invest, but honestly, even with the nose-bleed inducing heights of inflation right now, cash is still king.

Ceteris paribus, I’m putting it out there that March ‘23 will be the time to start loading up on some great cheap assets.

Look out for when the dumb money has finally left the building and pick up the scraps. $SPY $QQQ

Stocks have historically been the best hedge against inflation. Don't try to time the market. Buy on a regular basis and never stop until 1) your thesis breaks or 2) you need the money to live the life you invested to have.
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