December Review

This was another month of relative inactivity for us as we did not find as many set-ups as in the June-October period. Nevertheless, the trades that we did find worked quite well. We had one change this month which was to tighten the stop-loss from 0.5% to 0.3%, which if you recall was changed from 1% to 0.5% several months ago. We have found that both 1% stop-loss and 0.3% have been quite effective, but 0.5% seems to lie in a no-man's land.

During the operations of our service since June 2006 we have observed that traders often like to use different stop-losses for our selections. We have had success with our selections with both 0.3% stop-loss and 1.0% stop-loss. Some traders believe that a good trade should work immediately and thus prefer using a tighter stop (including us) and the 0.3% stop fits this approach well. Other traders prefer to give their trades more room and with a 1% stop loss, they have fewer losses, but at the same time assume more risk. From January on, data for both stops will be provided in our Historical Performance page and traders are urged to use whichever stop that fits their trading methodology.

Now on to the statistics:

All trades that hit our numbers from the trading lists are included. If a stock goes down 0.5% (and 0.3% after December 18) after it triggers our pick, it is considered a loss, even if she decides to reverse later on and go above our number. Wins start being counted at 1% -- this means that each win automatically includes a minimum 2-1 risk-reward ratio. Our win/loss rate for the month was 64%. We had 12 stocks trigger this month with 4 losses and 7 wins.

1 trade hit our number near the close and finished flat (and ran up 5 points the next day)

4 trades hit our stop-loss ( 3 of them hit the old 0.5% stop, and 1 hit the 0.3% stop)

7 trades yielded profits of minimum 1% ( 3 trades yielded 3%, 2 trades yielded 2%, and 2 trades yielded 1% )


We're relatively pleased by the numbers but hope to achieve the similar win-loss ratio but with many more triggers in the near future.