Ann: Altium Technology & Business Strategy Presentation, page-34

My trailing stop loss points for ALU were $13.09 (CBL) and $12.93 (2ATR). Both were hit, so I got out today. I regret not having exited yesterday after the first stop was hit, but I wanted a bit more room for the share to move.

I started trading in early 2000, hence I have lived through two savage bear markets. Lower cap higher beta stocks like ALU and NXT can halve in weeks during bear markets. The bear market teaches you that pre-calculated stop loss exit points are there to be obeyed because after you get out you can stand from a distance having the option of getting back in once price recovers. Today I exited ALU and NXT in order to protect open profits and limit downside risk to no more than around 0.5% of total trading equity. However, I keep on eye on previous portfolio stocks everyday just in case the up-trend resumes and I get a signal to get back in.

ALQ was another recent example where my trailing stop was hit and I quickly sold. Amateur traders make the mistake of putting on too much money on a stock, so that when stocks sharply correct around 3 to 6% like today, the loss is too large emotionally for them to sell. So they sit on the stock with several thousands of dollars loss gradually increasing while the stock continues down. The more it goes down, the harder it is to sell. That's why I recommend Dr. Van Tharp's books on optimal position sizing. When the market gets nasty like it did today, big position sizes greatly increase a trader's risk of financial ruin. CFD trading with leverage makes it an even quicker path to ruin.

The markets often exhibit what is called asymmetric price behaviour. After a strong run, price decreases much faster than they go up. We are now seeing that in many of the former lower cap leading stocks.

I was sitting on fairly large open ALU profit, but the only way to bank those open profits is by selling. Open profits are just like fantasy and dreams until you sell. Even if it is bitcoin with someone sitting on millions of dollars open capital gain, it is not reality until you gradually sell partials and bank profits.

There seems to be currently a shift from previous big gainers like ALU, NXT, BWX, SIQ etc, into larger cap more defensive stocks like WFD, HVN, JBH, BXB. It is possible that an XJO rally towards the end of December may be due to mostly large cap stocks. It is also sometimes a sign of the end of bull markets when there are sector shifts away from former lower cap star performer stocks into relatively boring large cap 'blue chip' stocks.

(ACX_APX_ASL_A2M_BAL_BKL_BSL_CLQ_CWY_DCC_EHE_ILU_NWH_SDF_SPL_SYR)