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DoINeedOne

Sell X% When Price Rises X%

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So thought i would start a new thread rather than ruin the library thread @MrXxx recommended a book

The Art of Execution: How the world's best investors get it wrong and still make millions in the markets

https://www.amazon.co.uk/gp/product/085719495X

It was a interesting book can read it in one day but it showed different investor styles and how taking profits to early can not be a great idea as they can still run higher

He mentions the ones who did best in regards to letting there winners run were the ones who took a little bits of profit when a stock was rising but not all of it he didn't mention any percentages just mentioned they nibbled profits and performed better than the ones who sold everything when it went up 10-30%

So that go me thinking about rules which i use for work and this book mentioned having set rules to help you make decisions better

But what rule would be best i thought a spread sheet what be nice to test some ideas 

If we bought XYZ stock at £1 and purchased 10,000

The book does talk about laddering in too but for the moment lets keep it simple i did add average buy in cost to the sheet to use for that 

So lets start with what if we sold 5% every time the stock price rose 10%

895804244_2019-06-2812_14_34pm.png.44227693236147360b8bb0bfb6b8741f.png

The blue and green text is if we held all the way to £2.87 and sold Vs the rule of selling 5% during each 10% rise then sold whats left at £2.87

Maths should be correct 

giphy.gif?cid=790b76115d15f2166c6a546c77

 

Any suggestions on different rule i will post the results just tell me 

if prices rises percentage wise

and how much percentage wise to sell 

 

 

 

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How did he perform against people that just left it? I recall reading one broker (fidelity?) ran some numbers and their best performing accounts were the ones that left it well alone, mainly the people who had died.

What are the rules for under performing trades? 

I suspect on the way up one would need to tailor that as trading costs will be too high for the amount they're trading with.

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Posted (edited)
13 minutes ago, A_P said:

How did he perform against people that just left it? I recall reading one broker (fidelity?) ran some numbers and their best performing accounts were the ones that left it well alone, mainly the people who had died.

What are the rules for under performing trades? 

I suspect on the way up one would need to tailor that as trading costs will be too high for the amount they're trading with.

The best performers where the ones if i remember correctly that left it may of took a little profit if needed or if something changed in the company which made them sell to secure the profit

It did mention that investors who used the phone to call and make trades out performed the ones online and i remember reading what you say above about the people who died

One of the issues today is that being able to check prices and trade so easily via smartphones don't think it helps even with advertising it took me a long time to stop checking for sales and just let shit run (but set up alerts for rules incase something happens)

 

Edited by DoINeedOne

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4 minutes ago, DoINeedOne said:

The best performers where the ones if i remember correctly that left it may of took a little profit if needed or if something changed in the company which made them sell to secure the profit

It did mention that investors who used the phone to call and make trades out performed the ones online and i remember reading what you say above about the people who died

One of the issues today is that being able to check prices and trade so easily via smartphones don't think it helps even with advertising it took me a long time to stop checking for sales and just let shit run (but set up alerts for rules incase something happens)

 

I can well believe it. I've stopped checking my investments regulary now. I update my spreadsheets (expenditure, investments etc) once a month and rebalance once a quarter. I've become fairly unemotional with the whole thing now. Probably would be a lot different if I was trading even with small amounts. I'm not a gambler and don't have the personality for it, although something like the above would help me.

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I suppose a hybrid approach may be widening the % at which you sell at and including stop-losses for selling upwards and downwards within a laddering framework, that way you catch incrementally increasing values but also decreasing ones if a favoured share then becomes toxic, a ratchet type effect...I assume you can do this?; sure someone more experience will be along in a moment to confirm my `brilliant` idea is `pants`! :-)

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