I expanded on that last week and showed some amazing gains with a refined strategy.
In response, I was asked by many readers if there were any specific sell rules, besides waiting a specific amount of time. There wasn't. To respond to my readers, in my post this week I'm going to examine whether, if by implementing a simple 'sell rule', we can further improve upon this already nice performance. For my sell rule, I'm going to implement William O'neil's hard and fast law of selling any stock that has taken an 8% loss, which is followed by many.
To implement my strategy I'll use my same rules as last week:
1. Buy any stock that is at a 52 week high
2. Hold for a specific period of time (1, 3, or 6 months I'll look at here)
3. Sell after that amount of time, or keep if it is still at a 52 week high
and I'll add another rule
4. Sell if, at any point, the stock drops me below an 8% loss (this INCLUDES intraday prices). To make it even more realistic I'll assume 1% slippage meaning I take a 9% loss when trying to sell at an 8% loss.