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written by reader TradeStops

By turbo873, August 29, 2017

To begin, it is hard to argue that having a predetermined maximum acceptable loss on every stock one owns is not a good idea. And a system that follows the issue price as it rises and falls. I have also heard the old ”Well you could get out too soon…” and am reminded of the Casino Owners Creed. ”You can’t win if you’re not in.” Right. But having been a regular user of Trade Stops service for 3 years, I am puzzled by the frequent result of the Risk Rebalancer feature. My experience has been fairly consistent. The Rebalancer nearly always want to sell large chunks (up to 51%) of my winners and reinvest in the losers. I operate on a different strategy which is ride your winners and prune/kill your losers. Of course I have never seen this strategy back-tested or even discussed except for the winners part. And unless you have entered the stops in your broker portfolios (a really bad thing to do) you can always adjust them to current conditions.

Love to see some comment about this.
PS: I have asked both Richard Smith (by email) and Porter Stansberry (one of my major brokers and an investor in TradeStops) and never gotten an explanation.

This is a discussion topic or guest posting submitted by a Stock Gumshoe reader. The content has not been edited or reviewed by Stock Gumshoe, and any opinions expressed are those of the author alone.



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5 years ago

I’ve subscribed for about two years and have been very satisfied (hence my lifetime subscription). I do have some reservations re: the risk rebalancer. Currently I have profits in AAPL and MSFT of 76% and 46%. The risk rebalancer tells me to reduce my allocations from 4.94 to 2.74 and 4.57% to 3.02% respectively. I think the rebalancer is strictly technical and this may account, in part, for what you are seeing.

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