People's United Financial, Inc. Trading Strategy

PBCT Stop Loss Techniques

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Annualized Returns of Trading Strategies for PBCT

	Best Return	at Stop	Episodes	Length	Best +10	at Stop	-5 to -25
Buy and Hold	12.70 %		0.21	1201.00
Buy On Rise Hold	7.96 %		0.27	945.11
Buy On Dip Hold	-5.29 %		0.39	647.88
Signal and Hold	12.94 %		0.20	1248.63
Stops Only	39.15 %	-0.07	3.00	79.07	36.23 %	-0.22	29.72 %
Sell Signal Trim Stops	41.15 %	-0.17	1.00	367.28	41.15 %	-0.17	34.20 %
Buy Signals	43.61 %	-0.07	3.00	88.78	35.65 %	-0.22	30.19 %
All Methods	41.34 %	-0.17	1.00	385.09	41.34 %	-0.17	33.68 %

This table shows the results some simple trading policies from brute-force calculations on every trading day during the last 10 years. The concept of stops does not apply to the top few entries, which are various flavors of the well known Buy and Hold strategy. This much used strategy yielded 13.00 %.

The naïve interpretation of the Buy and Hold strategy is tested by buying on every day of the period, and evaluating the value of the accumulated holdings at the end. A less simplistic version might involve the momentum investor's ploy of buying only on rising prices, or the more contrarian tactic of buying on the dips.

Our tests show it is generally better to buy on the dips rather than trying to follow the momentum of the market. But PBCT is an exception to that rule. Sadly, neither of these policies were able to match the unadorned Buy and Hold in this somewhat unusual case. Some stocks just do not seem to respond in a normal way to the usual technical signals. Here a signaled buy and hold offers no improvement at all!

The worst defect of the various Buy and Hold strategies is that they do not offer a methodology for cutting losses.

From the Report Dated 11/11/2010: At least from the standpoint of a single company strategy, the best setting over the past 10 years has been -7 percent for PBCT when adjusting stops weekly. This setting has produced a historical yield of 39.00 %. (The yield during the holding period is annualized to provide this figure).

How to set sliding stop limits for People's United Financial, Inc.:

Stop loss limit orders would appear to be almost always desirable. But where to set the stop limit is controversial. Setting to limit too low may allow for too great a loss. But setting the limit too high may cause the trade to "stop out" prematurely, perhaps missing a rally and also incurring an unwelcome brokerage fee.

Two issues need to be settled in arriving at a stop limit strategy. The first is to determine the price to position the stop loss at a percentage below the buy-in price. The second is to determine a strategy for raising or sliding the stop to lock in gains without undue risk of prematurely "stopping out" on some insignificant dip in price.

Some would advise you to set the stops at what you feel to be an acceptable loss. However, "feeling" is an extremely misleading guide. These charts are the output of a "brute force" calculation giving results for every stop loss setting from one percent to fifty percent on every trading day of the past ten years.

The bars represent the annual percentage appreciation achieved for each stop loss setting. This percentage is numbered on the right (blue) axis. The purple line depicts the number of "stop outs" on average per year at each stop loss setting . Transaction costs directly relate to this number on the left (purple) axis.

These charts represent different strategies for "sliding" the stops to lock in gains. The first simply moves the stop up every day to the pre-determined percentage below the close price. The others move the stops up at the end of every week, and at the end of every month. Generally speaking, it seems better to move the stops less frequently than daily.

More than 70 Hi-Rez charts daily for People's United Financial, Inc.:

Predictions

Support and Resistance

Frequency Analysis

Japanese CandleSticks

Technical Oscillators

Moving Averages

Stratification Analysis

Politics and Prices

Classical Time Series

Risk-Volatility

Bernoulli Analysis

Momentum Investing

Back to PBCT Table of Contents

Technical Buy Signals and Trailing Stop-loss

Trailing stops set at -18.00 %

Start	End	Buy In	End Price	Dif	Total	Type	Sessions
7/18/2001	10/29/2001	3.50	3.19	-0.31	-0.31	1	68
8/22/2001	10/23/2001	3.96	3.24	-0.72	-1.03	1	39
9/28/2001	9/18/2002	3.26	3.41	0.15	-0.88	1	243
11/5/2001	9/18/2002	3.17	3.41	0.24	-0.64	1	217
1/23/2002	9/18/2002	3.25	3.41	0.16	-0.48	1	164
2/27/2002	9/18/2002	3.46	3.41	-0.05	-0.53	1	141
9/20/2002	6/29/2007	3.45	15.57	12.12	11.59	1	1201
12/19/2002	6/29/2007	3.95	15.57	11.62	23.21	1	1138
2/14/2003	6/29/2007	4.01	15.57	11.56	34.77	1	1100
2/27/2003	6/29/2007	4.10	15.57	11.47	46.24	1	1092
5/6/2003	6/29/2007	4.43	15.57	11.14	57.38	1	1045
12/29/2003	6/29/2007	5.47	15.57	10.10	67.48	1	881
1/16/2004	6/29/2007	6.22	15.57	9.35	76.83	1	868
2/3/2004	6/29/2007	7.05	15.57	8.52	85.35	1	857
3/15/2004	6/29/2007	7.30	15.57	8.27	93.62	1	829
3/31/2004	6/29/2007	7.84	15.57	7.73	101.35	1	817
7/14/2004	6/29/2007	8.22	15.57	7.35	108.70	1	746
7/20/2004	6/29/2007	7.86	15.57	7.71	116.41	1	742
9/10/2004	6/29/2007	9.02	15.57	6.55	122.96	1	705
12/17/2004	6/29/2007	9.86	15.57	5.71	128.67	1	636
1/18/2005	6/29/2007	9.60	15.57	5.97	134.64	1	616
10/6/2005	6/29/2007	11.92	15.57	3.65	138.29	1	434
10/17/2005	6/29/2007	12.23	15.57	3.34	141.63	1	427
10/18/2005	6/29/2007	12.66	15.57	2.91	144.54	1	426
11/28/2005	6/29/2007	12.89	15.57	2.68	147.22	1	398
5/26/2006	6/29/2007	13.73	15.57	1.84	149.06	1	274
9/6/2006	6/29/2007	15.50	15.57	0.07	149.13	1	204
9/20/2006	6/29/2007	16.41	15.57	-0.84	148.29	1	194
11/3/2006	6/29/2007	18.12	15.57	-2.55	145.74	1	162
11/27/2006	6/29/2007	17.91	15.57	-2.34	143.40	1	147
1/30/2007	6/29/2007	18.70	15.57	-3.13	140.27	1	105
4/12/2007	7/24/2007	18.16	14.88	-3.28	136.99	1	71
6/8/2007	8/1/2007	17.07	13.99	-3.08	133.91	1	37
6/3/2008	9/24/2008	15.16	16.16	1.00	134.91	1	79
10/31/2008	5/21/2009	16.15	14.43	-1.72	133.19	1	138
11/10/2008	5/21/2009	16.34	14.43	-1.91	131.28	1	132
11/12/2008	5/21/2009	16.56	14.43	-2.13	129.15	1	130
1/22/2009	5/20/2010	15.11	13.96	-1.15	128.00	1	334
1/29/2009	5/20/2010	15.37	13.96	-1.41	126.59	1	329
2/24/2009	5/20/2010	15.48	13.96	-1.52	125.07	1	312
4/29/2009	6/29/2010	15.12	13.22	-1.90	123.17	1	294
9/8/2009	6/29/2010	15.06	13.22	-1.84	121.33	1	203
11/23/2009	6/29/2010	15.36	13.22	-2.14	119.19	1	149
2/18/2010	7/2/2010	15.06	13.05	-2.01	117.18	1	94
5/7/2010	11/11/2010	14.06	12.61	-1.45	115.73	0	131
10/28/2010	11/11/2010	12.23	12.61	0.38	116.11	0	10

Total Session Units Invested 19359
Sessions In Time Span 2398 Avg. Units Invested 8.07

Unit Shares	Market Order Commissions	Stop Order Commissions	Profit
100	46 at $5.00	12 at $15.00	$11,201.00
100	46 at $30.00	12 at $30.00	$9,871.00
1000	46 at $5.00	12 at $15.00	$115,699.99
1000	46 at $30.00	12 at $30.00	$114,369.99

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