BHP has been one of the sit and hold type investors favourites because of the large dividends, however, price today is no better than it was 15 years ago so it is likely many of those investors have seen little capital reward - unles they have held since 2016 when price moved up.

Price has likely been on Elliott Waves A, B & C which move price lower and trading in a downtrend is like swimming upstream - very difficult. I'd expect material falls again from BHP when price eventually rolls over - as it must.

The stock trended from 2016 but our tight stop loss of 5% shown in the first video meant we kept being stopped out of trades and our profits were minimal. The second video shows the position with a 15% stop loss where profits were materially improved. Even the losing trades in the downtrend were smaller losses overall than those using the 5% stop loss.

This shows why you need to backtest with different rules and different stop losses.

 

 5% STOP LOSS EXAMPLE                                                                                                                       15% STOP LOSS EXAMPLE

Contact

Robert Norman

Phone: 0428 346 951
Email: robert@sharecharting.com.au

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