outs occur a bit sooner than genuine breakouts (71 % to76% of the way to the apex versus 78% or 79%). If you see a breakout occurearlier than normal accompanied by light volume, you should consider passingup the trade.Table 41.4 outlines breakout statistics for symmetrical triangle tops.Throwbacks and pullbacks occur about 58% or 59% of the time. That statis-
Percentage of breakouts occurringnear 1 2-month low (L), center (C),
572
Triangles, Symmetrical Tops
Where in the yearly price range do breakouts occur? Both breakoutdirections have the majority of breakouts within a third of the yearly high. Thisis perhaps not surprising since, by definition, prices rise up to the start ofthe formation. Such a rise should help boost the breakout into the higherreaches of the yearly price range. Mapping performance onto the yearly price
Do high volume breakouts result inupside breakout carries prices 38% higheronly sees prices climb by 35%, on average.
range shows that breakouts near the yearly high do well, with gains averaging40%, whereas when breakouts occur in the lowest third of the price range they
may not be due to chance.
score just 2 9%.Downside breakouts split evenly at about 20% each, with the lowestrange outperforming with losses averaging 23%. The numbers reinforce thebelief that you should short stocks making new lows, not new highs. Those
making new highs tend to continue rising.Table 41.5 shows volume statistics for symmetrical triangle tops. Thevast majority, over 80% in each case, have a downward volume trend as measured by the slope of a linear regression line of volume. You can see in the tablethat the day after the breakout usually scores the highest volume. It seems thatonce investors see die breakout on their charts in the evening, they trade on thenews the next day.Are low volume breakouts more susceptible to throwbacks or pullbacks?
No and yes. I rated a low volume breakout to be 50% of the 25-day movingaverage and a high volume breakout as 150% of the moving average. Forupside breakouts, only 6% of the formations throw back after a low volume
are closer at 21 % and 20%, respectively. Tonly for downside breakouts. This means
Trading Tactics
Table 41.6 shows trading tactics for symming tactic is to estimate how far prices willple of how the measure rule applies to a syThe triangle has a low at die start of thtract it from the high, point A, at 2 3 Vi. TheFor upside breakouts, add the height to theprice (281/s). For downside breakouts, subtfor the downside price target (14'/4). The ta
prices should exceed the target, especially f
When you compare the number of revidations of the prevailing trend, you find thing diat, the best trading methodology is to
breakout, whereas 56% throw back after a high volume breakout. For downside breakouts, the results split at low volume, 24%, and at high volume, 20%.
Table 41
In both cases, the sample size is small and that perhaps explains the conflictingresults.
Trading Tactics for SymmeTrading Tactic
Explanation
Measure rule
Compute the formafrom the highest higto the highest high; fheight from the lowetriangles can be halaccordingly.
Trade with the trend
As consolidations, pthe intermediate-ter
Wait for breakout
Always wait for the bthen trade with the
Stops
Place a stop-loss orbreakouts) or belowthis is too wide, useadjust the stops as p
Intrapattern trade
If the triangle is widethe top trendiine an
Table 41.5
Volume Statistics for Symmetrical Triangle TopsDescription
BreakoutUpward
BreakoutDownward
Number showing downwardvolume trend
131 or 81%
79 or 85%
Volume for breakout day andnext 5 days compared withday before breakout
167%, 170%, 161%,137%, 124%, 136%,
153%, 173%, 154%,1 32%, 117%, 132%
Are low volume breakoutsmore subject to throwback/pullback?
No
Yes
Performance of high volumebreakouts versus low volumebreakouts
38% versus 35%
21% versus 20%
574
Triangles, Symmetrical Tops
Sample Trade
575
Sample Trade
-15Jan 93
Feb
Mar
Apr
May
Jun
jul
Aug
Sep
Oct
Nov
Dec
fan 94
Feb
Mar
Father Flannigan is a priest who tends his flock in a church near where I live.He is your typical man-of-the-cloth conservative. In his trading he likes to playit safe and tries not to be greedy.He first noticed the symmetrical triangle shown in Figure 41.8 in midMay, just as prices touched the lower boundary. He reviewed the identificationguidelines and convinced himself that he had identified the triangle properly.The day after prices closed outside the top trendline, he placed an orderto buy the stock and received a fill at 2!3/4, about midrange for the trading day.Immediately after a phone call confirmed the order, he scurried into thechurch and said a prayer for divine intervention leading to a profitable trade.His prayers seemed answered in the days that followed as prices rosesteadily to a high of 223/4 before trouble set in. Prices began heading down andFather Flannigan wondered what he could do to change matters. He called hisbroker and placed a stop-loss order at 183/4, H below the lowest formation low(shown as point B).
Figure 41.8 A symmetrical triangle top followed by an ascending scallop and a
As prices descended, he spent more time in church asking for forgiveness
head-and-shoulders top. To use the measure rule, subtract the low (point B) fromthe high (point A) to get the formation height. For upside breakouts, add the
for his sins and a little help with the trade. A crack of thunder announced thatHe was not pleased and prices threw back to die triangle apex and a littlebelow. Prices hovered there for 3 days then began climbing slowly at first, but
height to point A and for downside breakouts, subtract it from point B. The resultis the expected target price.
direction of the intermediate-term price trend. If prices were rising leading tothe formation, they should break out upward and continue up.
However, since these chart patterns do reverse about a third of the time, itcan pay to wait for the actual breakout. Once prices close outside the trendline,take a position in the stock by trading with the trend (go long on an upsidebreakout and short on a downside one).
Place your initial stop just above the highest high or below the lowest lowin the triangle. In Figure 41.8, place the stop at 183/4, or Hi below point B. Manytimes, if prices reverse, they either stop at the trendline or triangle apex. Whenthey fall below the lowest low or rise above the highest high, then you know
prices are moving against you and it is time to close out the trade.If the triangle is tall enough, consider making an intraformation trade.Buy when prices touch or near die bottom trendline and begin moving up, orsell short as they round over at the top. If you are lucky, you will be in the correct direction for the breakout and can let the trade ride.As prices move in the breakout direction, move your stop to capture more
of the profit. That way, even if the formation flames out quickly, you will havecaptured a measure of profit.
rapidly gaining momentum.
Now diat the dirowback was complete, Fadier Flannigan computed thetarget price using die measure rule and came up with 28'/s. He called his broker, canceled his stop, and placed a limit order to sell his shares should pricesreach the target.
For almost 2 weeks, things were looking up as prices climbed to 22 Hthen stalled. Again, prices faded down to the triangle apex at 20 and movedhorizontally for a few weeks in the heat of August. Then they rounded up in asmall ascending scallop formation and Father Flannigan went to the churchand counted his blessings—all three hundred shares worth.Nervousness in mid-October forced the shares to tumble from a high of26 down to 221/z. Father Flannigan tried to place a stop-loss order but his broker would not allow both a stop-loss and a limit order to sell the shares at diesame time, so he quiedy watched his stock from his laptop while sitting in a pew.In late October prices began recovering and he breathed easier. In midNovember prices finally reached his limit price and his shares sold at 281/s, daysbefore it tumbled to 24.
Tour
42Triple Bottoms
577
for an upside breakout, then few triple bottoms fail to continue moving up, manyrimes substantially. The average rise is 38% with a likely gain of 20%, aboutwhat you would expect from bullish formations.Almost three out of four formations (70%) throw back to the breakoutpoint. This is somewhat misleading because the breakout point can be farremoved from the final trough—an average of almost 6 weeks away. But thetime is well spent as prices climb from the third recession to the breakout orconfirmation point.Just for kicks, I measured the average gain for those formations with athird bottom above the low posted by the second one. The gain is 48%, whereasthose with a third bottom below the second one score gains averaging just 31%.The differences are statistically significant but it may surprise you to learn theaverage price difference between the two bottoms is only 35 cents.Volume is important to performance. When the volume on the centerbottom is below that of the last bottom, the formations have gains averaging40%. With the reverse situation where the center bottom has the higher volume of the two, performance dwindles to 28%. I explore statistics later in thischapter.
RESULTS SNAPSHOTThree distinct minor lows at about the same pricelevel
Tour
Reversal or consolidation
Short-term (up to 3 months) bullish reversal
Failure rate
4%
Average rise
38%, with most likely rise being 20%
Volume trend
Downward
Throwbacks
70%
Percentage meetingpredicted price target
73%
Figure 42.1 shows an example of a triple bottom. Prices descend to the 37 areathree times and each time, they turn away; the level marks a zone of supportpreventing future declines. The sharp V-shaped recession, especially during thelast valley, is typical for triple bottoms. The rounded-looking rise from the firstvalley to the second is also characteristic of triple bottoms but not a strictrequirement.The price level of the three valleys is nearly the same, in this case, within3/s of one another. That is a key element of triple bottoms as we see in the Identification Guidelines section.Each chart formation is unique with characteristics that distinguish itfrom other patterns, and the one in Figure 42.1 is no exception. The stockreaches a low in mid-October 1992, after trending down for 5 months. Thenprices retrace their losses and stray into new high territory before headingdown to the first triple bottom low. Support reached during formation of thefirst low is set up by the peak back in May 1992. Prices climb to the 37 area several times from January to May but fail to burst through the resistance.The multiple hits on the ceiling are in no small measure responsible forthe support the triple bottom encounters. As prices descend to 37, investorswilling to part with their shares at the lower level are scarce. When someonedoes offer to sell, buyers snatch the stock believing they are getting a good bargain. And they are right. Prices do not meander at the 37 level for long. If you
Appearance
Surprising findings
Formations with a third bottom above the second oneperform better with an average gain of 48% versus 31%.Formations with higher volume on the right bottom,when compared to the center one, have gains averaging40% versus 28% for the reverse combination.
See also
Broadening Bottoms; Broadening Formations, RightAngled and Descending; Broadening Wedges,Descending; Head-and-Shoulders Bottoms; Headand-Shoulders Bottoms, Complex; Triangles,Descending
One of the surprising things about triple bottoms is their low failure rate: 4%.For some reason, I expected it to be higher. If one plays by the rules and waits
576
578
Triple Bottoms
Identification Guidelines
579
Table 42.1Identification Characteristics of Triple Bottoms
Viacom Inc. (Entertainment, ASE, VIA)
- 67
Characteristic
Discussion
Three large, distinct bottoms
Look for three minor lows, well separated anddistinct. The bottoms are usually large but sharp,and the price rise between them often appearsrounded but need not be.
Same price
The price variation among the three bottoms isminor. The center bottom should not be
significantly below the other two, otherwise it is ahead-and-shoulders bottom.
Nov 92
Dec
Jan 93
Feb
Mar
Apr
May
Jun
Jul
Aug
Downward volume trend
The overall volume trend is usually downward butmay be high in each of the three bottoms.Volume is usually highest on the first bottom andweakest on the last one.
Confirmation point
Prices must rise above the highest high in theformation (the confirmation point) or the chartpattern is not a triple bottom.
Sep
Weekly chart
Figure 42.1 A somewhat unusual triple bottom as it forms in the middle of a rising price trend. Prices eventually rise to 67'/2 from the confirmation level of 46'/2,
look closely at Figure 42.1, each valley floor is a 1-day downward spike, albeit
small but visible.The start of the formation, from the first to the second bottom, looks likea broadening top, right-angled and ascending with its horizontal bottom andup-sloping top trendline. However, there are not enough price crossings toreally validate the formation. It always makes me nervous when I see plenty ofwhite space in a formation (such as that shown between the first and secondbottoms). When the rise between the second and third troughs fails to comeanywhere near the up-sloping trendline, the jig is up.Prices stop rising at the same point, about 46, making the triple bottomlook like a double top. This, too, fails to come to fruition when prices reach the37 support zone and turn around. The double top remains unconfirmed and itjust becomes another two bumps on the price chart.The convoluted creation of a triple bottom helps explain why the formation is so scarce, but I discuss statistics later. First, how do you identify a triplebottom?
Identification GuidelinesTable 42.1 outlines the guidelines for identifying triple bottoms. I think mosttechnical analysts will tell you that not any three bottoms will do for a triplebottom. The three bottoms are usually large and well separated with generally
Since triple bottoms are usually large priceformations, look at the weekly chart to help
identify the longer variety.
rounded rises in between. The lowest price in each bottom is at about thesame level. If the center price is lower than the other two, then you might be
looking at a head-and-shoulders bottom. When the bottoms are successivelylower in price, it might be one of the broadening series of formations (broadening bottoms; broadening formations, right-angled and descending; broadening formations, right-angled and ascending if the bottoms are flat but thetops form successively higher peaks; and broadening wedges), so consult theappropriate chapter on those formations.The volume trend usually recedes over the course of the formation. Sincethe formation tends to be long, the volume pattern appears ragged or irregular at times. Each of the three bottoms usually shows volume that peaks abovethe days leading to the bottom with the first bottom usually having the highest volume of the trio. In the Statistics section of this chapter we delve into thevolume pattern more thoroughly.Now that we have reviewed most of the guidelines, what does a triple bottom look like? Figure 42.2 shows a good example of a triple bottom. Notice thethree downward price recessions. They are distinct and separated with therally between each bottom quite pronounced. Prices rise from the low of about35 to the confirmation line just over 40. The confirmation line is the highesthigh reached during the chart pattern. It serves as the breakout point, the pointto which prices must rise before any three minor lows become a true triple bottom. When prices rise above the confirmation line, the formation confirms andprices should continue rising.
580
Focus on Failures
Triple BottomsAmgen Inc. (Drug, NASDAQ, AMGN)
Whirlpool Corp. (Home Appliance, NYSE, WHR)
First Bottom
9 2 D 9 3 F M A
Apr 92
May
)un
Jul
Aug
Sep
Oct
Nov
581
Dec
Jan 93
Second Bottom Third Botto
M )
J
A
S
O
N
D
9
4
F
M
A
M
]
)
A
S
O
N
D
Feb
Figure 42.2 A triple bottom with three widely spaced, distinct troughs. A broadening top appears in mid-November.
You can see in Figure 42.2 diat the three bottoms are at nearly die sameprice. Only the last bottom falls short of the goal. As we see in the Statisticssection, diis often signals a better performing formation. This triple bottom isthe beginning of a large, extended move that takes prices from a low of 34!/2 toa high of 7 3'/2 in 16 months.The volume trend in diis formation is downward with die largest concentration of high volume on die first bottom. The center bottom has subduedvolume and is even lower on the diird bottom in early October. Volume spikesupward as prices rise to the confirmation point in mid-November. Then,prices consolidate for about a week before attempting to pierce die old resistance line at 40'/2. On above average volume, prices push through the old barrier and quickly jump three points, build a broadening top formation, diencontinue higher.Triple bottoms are usually large enough to be visible on weekly chartssuch as that shown in Figure 42.3. The three minor lows are evident in dieweekly chart. The first rally peaking in early May marks die high point thatlater becomes the confirmation level. The climb between die second and thirdbottom is suspiciously flat, but rarely does any chart pattern fit the ideal shape.In diis instance, each bottom is successively lower dian the prior one. A lowerlow price on die last bottom is a clue to impending underperformance. That isexactly what happens as prices climb above die confirmation point of 213/s toreach a high of 26 before heading back down. Aldiough die 22% gain is belowaverage, it is still better than taking a loss.
Figure 42.3 Triple bottom on the weekly scale. Many triple bottoms are visibleon the weekly scale due to their long duration.
Investors not selling at the high see their investment dwindle to 173/s bylate April 1994. If they hold their shares, the stock rebounds and does muchbetter, topping out at 66l/i in early March 1996.The throwback to the confirmation line could encompass any number ofweeks beginning in late October 1993. Prices pierce the confirmation line,moving up, then throw back to it within a month. Prices returning to the confirmation line beyond the 30-day time limit classify as normal price action, notthrowbacks.
Focus on FailuresOnce prices reach die confirmation line, diey usually have been rising for wellover a month, on average, since the diird bottom. Prices often pierce die resistance line but double back, hesitating before continuing up—most of the time.In some cases, prices rise above the confirmation point by less dian 5% beforethrowing back and continuing down. When that happens, it is called a 5% failure. In this study of triple bottoms, all chart patterns must stage an upsidebreakout (a rise above die highest high in the formation) before being labeleda triple bottom. Since all formations have upside breakouts, only 5% failuresremain to wipe the warm glow of a successful investment from a novice investor's face. Fortunately, 5% failures are rare. Only five (4%) fail to continuemoving up. Figure 42.4 shows an example of such a failure.
582
Triple BottomsBarrick Cold (Gold/Silver Mining, NYSE, ABX)
May 95
Statistics
Dec
Figure 42.4 A triple bottom failure. This triple bottom fails to make a convincingupward run. It is a 5% failure since prices fail to rise by more than 5% beforetumbling.
The triple bottom is immediately suspicious because it does not occur ata bottom. Prices round up beginning in mid-May, curl around, and head backdown, retracing their gains by November. On a short-term basis, prices movedown from a high of 27'/2 in mid-July to the first bottom at 243/4. The formation is a triple bottom since prices rise above the confirmation point in midSeptember. But the rise is brief—only 1 day has a close above the confirmationline before prices tumble.What are the signs of a budding failure? In this situation, the curved riseleading to the triple bottom suggests a rounding top. The volume pattern issuspiciously flat, but an irregular or abnormal pattern is common and shouldnot automatically disqualify a formation. Perhaps the most likely failure isnot one of performance but of identification. Are the three bottoms wellseparated, each a significant minor low in its own right? Are the low pricesnear to one another without the center bottom being meaningfully below theother two?As you look at the formation, it should take on a striking appearance andalmost say to you, "Yes, I am a triple bottom!" There should be somethingfamiliar, a special quality that distinguishes a valid triple bottom from anyother three-lump configuration. If it does not scream, "Buy me!" then youshould probably look elsewhere.One last point. If you discover four or five triple bottoms in a stock, thenyou are probably making an identification mistake. This is a rare formation,appearing only 122 times in 2,500 years of daily price data.
Table 42.2 shows the first batch of statisticsearlier, triple bottoms are comparatively rar500 stocks over 5 years. Most act as reversaThe failure rate for triple bottoms is ontom. All measurements begin at the confbetween the three bottoms. Prices have totion is not a triple bottom. Then prices have5% or the formation is a 5% failure. With srise above the confirmation point, they contback, so watch for it). A formation also failsest low. With such a hefty decline needed bhelp explain the low failure rate.The average rise above the confirmatiof 20%. The most likely gain derives fromshown in Figure 42.5. Although the 20% cthe surrounding columns are almost as higthe most likely gain could range anywhereof gains over 50% tapers off quickly, thoug
Table 42.2General Statistics for TDescription
Number of formations in 500 stocksfrom 1991 to 1996Reversal or consolidationFailure rate
Average rise of successful formationsMost likely riseOf those succeeding, number meetingor exceeding price target (measure rule)Average formation lengthDays between bottomsFormation end to upside breakoutThrowbacksAverage time to throwback completionFor successful formations, days toultimate highPercentage of breakouts occurring near12-month low (L), center (C), or high (H)Percentage gain for each 12-monthlookback period
584
Triple Bottoms
likelihood that you will not be buying into a
not rise to the confirmation point beforeRemember, true triple bottoms are rare, an
eyes before pulling the trigger.Once prices rise above the confirmatbreakout point before turning around anoccur often enough—70% of the time—thatage of them. The throwback may be just
near the confirmation point for several daysa throwback occurs, wait for prices to begtrade or adding to your position. Waitingsibility they will continue down after theThe average time to complete a throwback
40
50
60
Percentage Cain
than 27 days. I consider loop backs beyoprice action, not from a throwback.For those formations that work as exp
fail), it takes over 7 months to reach the u
Frequency distribution of gains for triple bottoms. The most likely
since a 38% average gain does not happen
rise is 20%, the column with the highest frequency. However, the 10% through50% columns are almost as high. This suggests the most likely rise may be higher
confirmation points occurring within a thformation, does this not sound odd? Con
than 20%.
the highest point in the formation. If the y
Figure 42.5
bottoms begin in the center of the yearly
no surprise that the confirmation point pThe measure rule predicts how far prices will climb after the breakout. In
the Trading Tactics section I explain this in more detail, but suffice it to say73 % of the formations meet their price targets. This is somewhat low, as I consider 80% a minimum reliable benchmark.The average formation length is about 4 months, which makes triple bottoms one of the longer chart patterns. The formation length also makes triplebottoms visible on the weekly charts, so be sure to inspect them for anotherperspective before making a trading decision.I tallied the days between the three bottoms and they are nearly the same:
61 days separate the first and second bottoms and 60 days separate the centerand last bottom (measured from the lowest low in each bottom). I am not suggesting that a triple bottom has equally spaced bottoms. Some analysts say
there is a tendency for the first two bottoms to be wider apart than the last two.Figure 42.2 shows an example of this. The first low is further from the centerbottom than the last one. By contrast, Figure 42.4 shows the reverse with thelast valley further away from the center than the first one.After the last bottom, how long does it take to reach the breakout point(the confirmation line)? On average it takes 42 days—about a month and a half.Be patient. If the formation is a true triple bottom, prices will rise above theconfirmation point and continue rising significantly from there. If you jumpthe gun and buy after the third bottom but before confirmation, there is a high
performance onto the yearly price range, wabout evenly split. Formations that have
third of the yearly price range score bestthose in the upper third have gains of onlyTable 42.3 shows volume statistics fo(61%) of the formations I studied have a dlysts suggest that the highest volume happlowed by the center one with the weakes
analysis says this pattern is true in only 28more frequently than any other combinatiolitmus test to performance indicates that
gains of 28% as compared with gains of 38
When comparing the volume level o
when the center bottom shows less volume,28% for the traditional volume pattern cit
the two is statistically significant. When thelast bottom, performance diminishes to 35important to performance.
How does the breakout volume stackday's volume but quickly tapers off. Volubelow the volume reading the day before t
586
Triple BottomsTable 42.3Volume Statistics for Triple Bottoms
Description
Statistic
Number showing downwardvolume trend
74 or 61 %
Number of formations having consecutivereceding volume on each low
34 or 28%
Average rise of patterns with consecutivereceding volume on each low
28%
Average rise of patterns with center bottombelow volume of third bottom
40%
Average rise of patterns with center bottomabove volume of third bottom
35%
Volume for breakout day and next 5 dayscompared with day before breakout
163%, 124%, 87%, 83%, 78%, 72%
Trading TacticsTable 42.4 shows trading tactics and begins with the measure rule. The measure rule predicts the minimum price move. To use the measure rule, subtractthe lowest low from the highest high reached in the formation, then add thedifference to the highest high. The result is the expected minimum price move.For example, consider the triple bottom shown in Figure 42.6. The lowest lowoccurs on the first bottom at 21 '/4. Prices reach the highest high during therally from the first bottom to the second. The confirmation point is the highest high in the formation because prices must rise above this level before theformation confirms as a true triple bottom. In this example, the confirmationpoint is 253/4. The difference between the high and the low, 41/2, is the formaTable 42.4Trading Tactics for Triple BottomsTrading Tactic
Explanation
Measure rule
Compute formation height from highest high to lowestlow in the formation. Add the height to the highesthigh. The result is the expected minimum price move.
Wait for confirmation
Since most triple bottom formations continue headingdown, always wait for prices to rise above the highesthigh reached in the formation (the confirmation point).
Wait for throwback
Seventy percent of the formations throw back to thebreakout price, so consider waiting for the throwbackbefore investing or adding to your position.
Stop loss
Place a stop-loss order % below the lowest low. Raiseyour stop as prices rise.
Figure 42.6 This triple bottom acts as aRussell rode this triple bottom up but exitedsold, the stock was trading near 16.
tion height. Add the height to the confirmnamely, 30'A. Prices hit the target in early JWhen is a triple bottom not a tripleabove the confirmation point. Always waittakes about a month and a half to get therelongest time it took to reach the confirmatioat is 134 days—almost 5 months. Was the grose by 82%! By the way, 13 formations reless than 10 days.If you invest before die formation conforiginal trend. If the prevailing trend is dowthe support level shown by the three botremain flat for an extended period (up to athe confirmation point, should you invest?formations throw back to the confirmationmuch a throwback in the traditional sense asThey pause at the breakout point and movstrength for the push upward. That is whenspike that tags the confirmation price—adays after confirmation.At other times, prices return to the conless than 2 weeks but certainly no more tha
588
Triple Bottoms
you should invest or add to your position. However, do not do it immediately.The time to jump in is once prices flip around after the throwback and startheading up again. Otherwise, you risk throwing good money after bad as pricesthrow back and continue moving down. Do not let me scare you. This rarelyhappens (only 4% of the time), but it does happen.If you are so unlucky as to misidentify a triple bottom or perhaps to catchthe 4% that do fail, then be sure to place a stop-loss order about '/s below thelowest low. The three lows mark a point of support, so you will want to bejust under that to give the stock every opportunity to rebound before beingtaken out.If the decline to the stop point is too far, place your stop l/s below a nearersupport zone. Raise your stop as prices rise, that way you will be cashed out atthe first sign of trouble.
Sample TradeRussell is an engineer working in the telecommunications industry. He oncetold me that the half-life of an engineer's knowledge is 10 years. "After twenty,there's nothing left! That's when it's time to hide from management." Beforehis time comes, he hopes to have a nest egg of funds accumulated from investing in stocks he is familiar with.He likes to think he knows the telecommunications industry well enoughto invest in it. He is a player, an investor who might be in a stock for a week ortwo, while at other times he takes a longer view. Occasionally, his positions lastfor years; these are the most profitable.He invested in