PETM Stop Loss Techniques

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Annualized Returns of Trading Strategies for PETM
Best Returnat StopEpisodesLength Best +10at Stop -5 to -25
Buy and Hold22.35 %0.211201.00
Buy On Rise Hold28.69 %0.191330.74
Buy On Dip Hold37.19 %0.201276.39
Signal and Hold27.84 %0.181425.33
Stops Only27.32 %-0.104.0067.8523.19 %-0.110.65 %
Sell Signal Trim Stops27.75 %-0.104.0062.5522.61 %-0.114.69 %
Buy Signals47.95 %-0.094.0064.8138.60 %-0.1116.31 %
All Methods46.35 %-0.094.0059.5638.33 %-0.1120.86 %

These figures represent the annualized yields from several strategies for PETM, conducted mechanically for 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 22.00 %.

The most basic flavor of the Buy and Hold strategy is tested by buying on every day of the period, then holding all the way to the present date. Many people practice some of the more realistic versions of Buy and Hold, for example, Momentum Investors might buy on rising prices and then hold. A speculator with a bit of sophistication might buy on dipping prices, while a technician might wait for technical signals to buy and then hold.

Generally, we have found the Buy-On-Dip policy to offer better returns than the Buy-On-Rise. That is true in this case, indicating some of the benefit of betting against the crowd when investing. Both strategies offer improvement over the unadorned Buy and Hold. Using technical indicators to buy and then hold, improves on the simple Buy and Hold strategy, but is still not the best.

All the buy and hold strategies suffer from a dangerous defect, as they do not cut losses. The statistics underestimate the harm of this defect, because market statistics are based on companies that survive. Doctors bury their mistakes, but Exchanges de-list them.

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 -10 percent for PETM when adjusting stops weekly. This setting has produced a historical yield of 27.00 %. (The yield during the holding period is annualized to provide this figure).

Sliding Stops Reset Daily of PetSmart, Inc

How to set sliding stop limits for PetSmart, 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.

PETM:  Sliding Stops Reset Weekly

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.

Sliding Stops Reset Monthly of PetSmart, Inc

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.

General Market Conditions


More than 70 Hi-Rez charts daily for PetSmart, Inc:

PETM:  Sliding stops trimmed by sell signals
PETM:  Buy Signals and sliding stops
Buy Signals and sliding stops of PetSmart, Inc

Technical Buy Signals and Trailing Stop-loss

Trailing stops set at -18.00 %
StartEndBuy InEnd PriceDifTotalTypeSessions

Total Session Units Invested 5099
Sessions In Time Span 2398 Avg. Units Invested 2.13
Unit SharesMarket Order CommissionsStop Order CommissionsProfit
10036 at $5.0018 at $15.00$2,581.00
10036 at $30.0018 at $30.00$1,411.00
100036 at $5.0018 at $15.00$29,859.99
100036 at $30.0018 at $30.00$28,689.99

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