FAQs Frequently Asked Questions
Q: For Dr. K’s Market Direction service, when you recommend a specific ETF to buy, does that buy recommendation come with a stop loss as well (like 8% from the moment the ETF is bought), or would we wait until getting instructions to go ahead and sell? If so, do the leveraged ETF’s usually use looser stop losses? (I am guessing since they are more volatile that their drawdowns would be much stronger).
A: Some members use a change in direction of the MDM to sell their ETFs. Other members use their own stop loss figures especially if trading 3-times ETFs.
The stop loss was changed based on the change made to the model on Feb 9, 2019. This link provided in the MDM data tables gives all the details: https://www.virtueofselfishinvesting.com/faqs/answer/while-the-model-has-done-well-since-early-2019-and-outperformed-from-early-2016-to-early-2018-it-had-difficulty-for-much-of-2018-please-explain In short, the model is taking fewer signals to capture major trends which helps to minimize whipsaws though in consequence, the stop loss has also increased. Returns have markedly improved since Feb 9, 2019.
|First published:||31 Aug 2010|
|Last updated:||20 Aug 2022|