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A few years back I came across a paper or book that had a title something
like "Higgely Piggely Profits". The author looked at British companies and
found that there was no correlation between the profits one year and the
profits next year. There is a similar result with mutual funds that found
that buying the current top rated Morningstar funds led to disaster the next
year. It was better to buy the bottom or lower rated funds as they do
better the next year.
Lionel Issen
lissen@xxxxxxxxxxxxxx
----- Original Message -----
From: "Onno Goedknegt" <goedkneg@xxxxxx>
To: <metastock@xxxxxxxxxxxxx>
Sent: Monday, June 04, 2001 6:33 AM
Subject: Re: Buying 52-week highs?
> Another alternative approach can be:
> The Dutch ING bank used to publish the "buy-the-winner" strategy.
> They buy the top10 stocks with the best performance in the last year.
>
> I can not find their latest performance.
> When and if I find it, I will send the results to this forum.
>
> Onno
>
> At 10:05 PM 6/3/01 -0500, you wrote:
> >At 04:22 PM 6/3/01 -0700, you wrote:
> >>
> >>And as you point out, the buying part is only the beginning--how long do
> you hold it, or what king
> >>of exit strategies do you use?
> >>
> >>I offer this response as an example of how someone might use Metastock
to
> answer some of these
> >>questions.........
> >>
> >>These are just some ideas and suggestions. There are lots of
alternatives
> worth looking at in
> >>building a system that will work for this. As you asked for, mine is
one
> of many "opinions" and
> >>there are probably as many opinions as ways that you could make a
breakout
> system work or fail.
> >>You may find some setups that work very well for you and are suited to
> your style of trading,
> >>where others have written this approach off as being a failure or having
> limited profit potential.
> >
> >I went and tried a few things myself to see what I could come up with. I
> don't know how
> >to do what you did, but what I did was similar. I used the Debry Multiple
> Security System Tester
> >plug-in to test multiple securites based on what I drew up.
> >
> >I was able to come up with a fairly simple system that for the past 1 1/2
years
> >has been profitable using only price and volume to trigger a buy. But
only
> on NASDAQ
> >$5 and under stocks. It did not work well on stocks priced higher than
that.
> >The system bought in around a 52-week high. I've found the best results
so
> far with a
> >15% profit target using a 7% stop loss. The result was 20 winners and 13
> losers.
> >Dollars made vs. dollars lost was about 5 to 2. My broker's commission
was
> factored in.
> >I am unable to use trailing stops and breakeven stops with the Debry
plug-in
> >and no money management system was used, so the results could possibly be
made
> >better.
> >
> >It's still very early, but I think this method of buying has some
promise.
> >I'll keep plugging away at it with various entry/exit strategies and see
> what happens.
> >
> >
> >Thanks,
> >Brian
> >
>
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