How did you do today during the correction?

[maaakri]

I'm sure the red arrows would not have predicted the 500pt fall of the DOW or the 100pt fall of the Nasdaq today.

How well did your stop loss orders perform?

The reason I'm asking is because I've noticed that in large downswings, stop losses have a tendancy take to its time to fulfil the order.

I am looking for information like this, so we can evaluate different backup plans for such corrections in the future:
Stop loss set at $30, sold at $27


I did not have any positions today. Hope the correction was not painful to those who had positions today.
Kevin.

[AlexG]

Margin of safety is only "backup" you need

if you had stop limits good luck catching the rebound , thats where the money is made. I was been in 20% cash, I sold a couple of positions early this month.I will be a buyer if market continues downswing :)

[yostyid]

I was in cash but I do prefer trailing stops to regular stops as a backup. I would imagine even market orders were getting some big spreads this afternoon. I saw NYSE traded 2.6Billion shares and Nasdaq 3B. thats just a lot of orders and a lot of the movement was in a matter of minutes. Pretty crazy to watch it drop 200pts faster than it takes me to write this message.

And I think its too simplistic to say the rule/MOS would have protected you (100%) today. The market has been due for a correction. But there were still businesses at or past the MOS with good signals that got hammered.

[agrigsby]

i actually held my positions. I suffered a 3.59% loss and it's the first time I've seen one of my positions go RED on Overall performance for months now. I'm still contemplating a hold mainly because my portfolio is still doing slightly better than last month. But if I do decide to sell tomorrow, I'm only selling my gained positions and put that to new positions or new re-entry points.

[maaakri]

AlexG,

Margin of Safety as the only backup works great for Value Investors, but for Rule1 Investors, we sell as soon as the arrows says so. Unfortunately, since the market moved so fast yesterday and since we check only once a day, by the time we see the red arrows, the portfolio is already in the red. That is why Phil recommends stop losses as a backup.

[TradeHiker]

For many reasons I stopped using programmed stop loss orders some time ago. If anything I'll set an alert for a particular price. Yesterday smarted but I had sold two positions earlier in the week as they ran up (sell into the rally). The three positions left got bumped around pretty well but I took the opportunity to double up on one of my positions. I originally took shares at $81.65 and took another same-sized position at $78.78 which has me in nice shape today. One position (EBAY) is still in the GREEN while my third (CWTR) is still licking its wounds but ready for a comeback in coming months. I use the technical indicators outlined in Phil's book for a reference but by no means do I follow them unquestioned. I've had far too many instances of being led out of a position pursuant to signals only to be "signaled" back in a few days or weeks later. The only one to gain from a maneuver like that was Ameritrade. There's a lot to be said about "taking the emotion out of the trade" but self-discipline is cheap, especially when comparted to getting whipsawed a few times.