Frequently Asked Questions
Pocket Pivot Review / Buyable Gap Ups
What is the success rate of pocket pivots?
In practice, in an uptrending market, about half of high quality stocks showing pocket pivots will work. In the 1990s, this was roughly equivalent to the success rate of standard base breakouts during uptrending markets, except with pocket pivots, the losses are often contained to within 5% or less compared to buying breakouts since breakouts by their nature tend to be more extended above major moving average lines such as the 10dma. So, as with any stock regardless of the way in which it is bought, it’s important to keep stops on every position. As Bernard Baruch once said, to make big money, one does not have to be right but a handful of times as long as one capitalizes on their position when they are right, and cuts their losses when they are wrong.
Published: Sep 15 2010