Forum Archive Index - May 2002

[Phaedrus <Phaedrus@techemail.com>]

 Close examination of the attached chart shows the following characteristics :-
(1) Broadly speaking, the RSI gives very good signals with this stock.
(2) There are often multiple signals.
(3) If there are multiple signals, the later ones tend to be better.

Conclusions :-
(1) The RSI signals are worth acting on.
(2) Since you don't know if there will be multiple signals, you must act on the 
first.
(3) Should the first signal "fail", any subsequent signals should be acted on.

My actual transactions here are :-
Bought 5/4/02 at 281. Sold 8/5/02 at 269. A loss of 12 cents.
Bought 9/5/02 at 270. Current price 292. Current gain 22 cents.
Financially, my situation is almost exactly the same as it would have been had 
my stoploss not taken me out. The big difference is this. Had FBU continued 
falling, it would not have taken me with it.

The "failure" of my trade of 5/4/02 could have taught me :-
(1) I should not have bought on the RSI signal
(2) I used the "wrong" support level (274 instead of 269)
(3) My stoploss was too tight or,
(4) I should not have used a stoploss.
None of these are supportable, and would not be good lessons to learn. You must 
be true to your system - win or lose.

                 Phaedrus.

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