Stop Loss Settings and Strategy

Trading Strategy Analysis of TSCO

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Annualized Returns of Trading Strategies for TSCO

	Best Return	at Stop	Episodes	Length	Best +10	at Stop	-5 to -25
Buy and Hold	51.73 %		0.21	1201.00
Buy On Rise Hold	61.21 %		0.20	1265.36
Buy On Dip Hold	97.14 %		0.19	1337.91
Signal and Hold	94.96 %		0.16	1586.68
Stops Only	37.98 %	-0.34	1.00	476.01	37.98 %	-0.34	9.73 %
Sell Signal Trim Stops	44.46 %	-0.13	4.00	56.41	44.46 %	-0.13	25.04 %
Buy Signals	89.65 %	-0.34	0.00	740.89	89.65 %	-0.34	50.44 %
All Methods	98.84 %	-0.13	4.00	63.02	98.84 %	-0.13	69.08 %

These figures represent the annualized yields from several strategies for TSCO, conducted mechanically for 10 years. The top lines of the table show results from several variations on the classic Buy and Hold strategy, for which the concept of stops does not apply. This much used strategy yielded 52.00 %.

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. 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.

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 11/4/2010: -34 % has been the best sliding stop-loss setting for TSCO in the past. This assumes the stops are adjusted on the week-end. This setting has produced a historical yield of 38.00 %. (The yield during the holding period is annualized to provide this figure).

How to set sliding stop limits for Tractor Supply Company:

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 Tractor Supply Company:

Predictions

Support and Resistance

Frequency Analysis

Japanese CandleSticks

Technical Oscillators

Moving Averages

Stratification Analysis

Politics and Prices

Classical Time Series

Bernoulli Analysis

Momentum Investing

Seasonal Trends

Back to TSCO 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
4/24/2001	9/19/2001	1.73	2.34	0.61	0.61	1	99
5/11/2001	9/19/2001	1.99	2.34	0.35	0.96	1	86
5/21/2001	9/19/2001	1.96	2.34	0.38	1.34	1	80
5/30/2001	9/19/2001	1.91	2.34	0.43	1.77	1	74
7/5/2001	9/19/2001	1.99	2.34	0.35	2.12	1	49
7/10/2001	9/19/2001	1.94	2.34	0.40	2.52	1	46
7/24/2001	9/19/2001	2.73	2.34	-0.39	2.13	1	36
8/14/2001	9/19/2001	2.63	2.34	-0.29	1.84	1	21
8/15/2001	9/19/2001	2.67	2.34	-0.33	1.51	1	20
8/21/2001	9/19/2001	2.52	2.34	-0.18	1.33	1	16
9/10/2001	7/16/2002	2.54	7.34	4.80	6.13	1	208
9/21/2001	7/16/2002	2.22	7.34	5.12	11.25	1	203
10/15/2001	7/16/2002	3.30	7.34	4.04	15.29	1	187
10/26/2001	7/16/2002	3.44	7.34	3.90	19.19	1	178
12/18/2001	7/16/2002	4.19	7.34	3.15	22.34	1	142
1/11/2002	7/16/2002	4.62	7.34	2.72	25.06	1	126
1/23/2002	7/16/2002	4.56	7.34	2.78	27.84	1	119
2/14/2002	7/16/2002	4.70	7.34	2.64	30.48	1	104
2/26/2002	7/16/2002	5.15	7.34	2.19	32.67	1	97
4/16/2002	7/16/2002	6.58	7.34	0.76	33.43	1	63
6/28/2002	7/17/2002	8.82	7.05	-1.77	31.66	1	12
7/16/2002	12/24/2002	7.34	8.70	1.36	33.02	1	113
10/15/2002	12/24/2002	9.49	8.70	-0.79	32.23	1	49
2/26/2003	5/7/2004	8.35	17.93	9.58	41.81	1	302
3/31/2003	5/7/2004	8.20	17.93	9.73	51.54	1	279
5/2/2003	5/7/2004	11.14	17.93	6.79	58.33	1	256
5/19/2003	5/7/2004	10.48	17.93	7.45	65.78	1	245
6/2/2003	5/7/2004	11.43	17.93	6.50	72.28	1	236
8/18/2003	5/7/2004	15.39	17.93	2.54	74.82	1	182
9/30/2003	5/7/2004	16.30	17.93	1.63	76.45	1	152
1/21/2004	5/7/2004	21.86	17.93	-3.93	72.52	1	75
3/29/2004	5/10/2004	19.37	17.17	-2.20	70.32	1	29
5/18/2004	8/6/2004	17.66	16.34	-1.32	69.00	1	55
7/13/2004	9/29/2004	19.32	15.75	-3.57	65.43	1	55
9/28/2004	9/29/2005	17.15	22.88	5.73	71.16	1	254
4/21/2005	9/29/2005	20.65	22.88	2.23	73.39	1	112
8/9/2005	10/6/2005	26.29	21.83	-4.46	68.93	1	41
10/19/2005	6/6/2006	21.74	27.15	5.41	74.34	1	157
2/2/2006	6/6/2006	30.75	27.15	-3.60	70.74	1	85
6/15/2006	7/20/2006	25.23	22.28	-2.95	67.79	1	24
9/5/2006	7/26/2007	20.33	22.48	2.15	69.94	1	223
9/11/2006	7/26/2007	21.07	22.48	1.41	71.35	1	219
11/27/2006	7/26/2007	23.55	22.48	-1.07	70.28	1	165
4/11/2007	7/26/2007	27.97	22.48	-5.49	64.79	1	74
7/30/2007	11/5/2007	24.27	19.52	-4.75	60.04	1	69
11/26/2007	1/3/2008	19.86	16.42	-3.44	56.60	1	26
6/27/2008	10/3/2008	14.69	18.31	3.62	60.22	1	68
10/29/2008	11/17/2008	19.14	16.82	-2.32	57.90	1	13
11/19/2008	1/14/2009	16.14	15.60	-0.54	57.36	1	37
12/1/2008	1/14/2009	17.46	15.60	-1.86	55.50	1	30
1/8/2009	11/4/2010	16.39	41.07	24.68	80.18	0	460
1/16/2009	11/4/2010	16.94	41.07	24.13	104.31	0	454
7/8/2009	11/4/2010	22.21	41.07	18.86	123.17	0	336
4/7/2010	11/4/2010	33.14	41.07	7.93	131.10	0	148
6/2/2010	11/4/2010	33.71	41.07	7.36	138.46	0	109
6/25/2010	11/4/2010	30.96	41.07	10.11	148.57	0	92

Total Session Units Invested 7190
Sessions In Time Span 2398 Avg. Units Invested 3.00

Unit Shares	Market Order Commissions	Stop Order Commissions	Profit
100	56 at $5.00	19 at $15.00	$14,292.00
100	56 at $30.00	19 at $30.00	$12,607.00
1000	56 at $5.00	19 at $15.00	$148,005.00
1000	56 at $30.00	19 at $30.00	$146,320.00

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