Episode #6 - The Stoploss

Week 25 - 2025

Previous Episode in Retrospective

After diving into the EMAs for a couple of weeks, my conclusion is that I can use them well as a buy signal. By placing the 20 EMA on the chart and then selecting bottoms above the line and prices breaking out above the last top, you automatically select stocks that are in a trend on the long side or just starting to be. After any buying, you switch to stoploss, breakeven and exit levels and leave the EMAs for what they are. This gives the price a lot of room and prevents premature selling that often happens when you use the EMA-20 as a stop. I have been struggling a lot with crossing the 20 EMA and the matching decision of when to sell. After crossing or at the end of the day. By releasing the EMA after buying, you avoid that dilemma. A new challenge does arise (of course). What if your price rises to 2.4R and just misses the exit level. If you then see the share price fall to breakeven again, you are not happy. The question then is how to deal with that.

And if you use the 20 EMA as a sell signal, the key is to watch the price only a short time before the end of the trading day. It often crosses the EMA during the day, but has rebounded by the end of the day. Another option is to use the rule to sell only at the first bar that stays completely below the 20 EMA. In doing so, you will have to give back more profits, but it is a good weapon against the many feints that often wrongly manage to move you to sell the stock.

After this retrospective, I will move on to the topic of this episode: the stoploss. I will go a little deeper into the background and my experiences with it. I the poll I will ask you a question about the stoploss and then I will give the assignment of this episode. Finally, I will outline my experiences over the past few weeks and give the results.