Avoiding Stop-Losses with RVOL-Based Execution
This week, price alerts kept triggering, but the outcome today served as a reminder of the importance of Relative Volume (RVOL) based execution in individual stock, and the timeless principle of relative strength (volatility adjusted RS for my case).
1. I avoided numerous stop-losses in individual stocks. by sticking to RVOL-based execution, including $Figma(FIG)$ $Webull Corp(BULL)$ $Dutch Bros Inc.(BROS)$ $Rezolve AI(RZLV)$ $Energy Fuels(UUUU)$ $Circle Internet Corp.(CRCL)$. Stop loss in liquid $Microsoft(MSFT)$ (via $DIREXION DAILY MSFT BULL 2X SHARES(MSFU)$ ) is unavoidable, A-rated execution spot in my book, $Meta Platforms, Inc.(META)$ (liquid) fared better but the execution spot on Tuesday was already 4xATR from 50-MA, will track how it fares on T+3 (Friday)
2. I captured $Global X U.S. Infrastructure Development ETF(PAVE)$ via initial $iShares U.S. Home Construction ETF(ITB)$ $SPDR S&P Homebuilders ETF(XHB)$ strongest group RS idea, which today closed at a high alongside ITB, using a volatility-adjusted relative strength approach, ignoring the others eg. $iShares U.S. Aerospace & Defense ETF(ITA)$ .
If your long term average win rate is below 50%, I strongly recommend adding stricter thresholds to reduce the number of trades while improving the quality of your execution. You need to shift your approach from seeking reasons to trade, to seeking that 1 reason to avoid a trade.
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