bcrafty - As always, I enjoy your posts!
And this is a good observation...
"My biggest problem with anybody's pick, whether it's based
on TA, FA, or a combination, is that almost nobody lists
an exit strategy, no matter how vaguely or loosely one
is making it. For me, an exit strategy is as important
as an entry, and it's one that the stock pickers should
make note of as well. If the picker is implying that he
know when to hold 'em he should complete the idea by
giving us a thought of how he knows when to fold 'em."
I agree.
And I admit that I'm guilty of not citing exit strategies.
My rationale is simple - I don't know in advance when
I'm going to pull the plug. I could say that I'll be exiting
if the price breaks through support (or resistance). But, in fact,
I may or may not. And that's because the market is dynamic.
Gee, that sounds like something we'd hear in a college
econ course, but what I mean is that, for me, it matters
a great deal how the price arrives at support
(or resistance).
Listing a cross of moving averages or any of a number
of indicators might justify an exit. But again, these may or
may not cause me to exit. Example: if the pullback is on
very light volume, that is, it looks as though the buyers
just need to rest and regroup, I wouldn't exit a
winning position - all other things being equal.
Rather than stating a specific exit, that may in
all likelihood change, perhaps I could say that I'd like to
exit with X percentage of profit...
or begin scaling out at the first pullback from resistance...
or if seasonality looks like it's kicking in... or when the
price has stalled for X number of days/weeks/...
or when the dog barks...
I'll have to think about this some more.
And how's the legal biz these days? |
