52 week highs and all time highs strategy

I would like add my 2 cents before our doctor sir comes and guides us.

From what I have experienced, there will be effect on the stocks if there is a strong correction across indices. Almost all stocks fall, to varying degrees. Some will be spared, owning to fundamental reasons, support levels, intrinsic value zones, areas of interest, demand etc. And these kind of falls are more pronounced in mid cap and small cap stocks.

And depending on the reasons for the fall, the severity of the fall, the consensus of the participants, the reversal could happen sooner than later, and the reversal can happen to the extent of the fall, like we have been seeing in the current market. So a wide stop loss can help, but as it is hard for me to guess what can happen after such a fall, so I prefer getting out and come back later.

If we are taking a trade based purely on technicals alone, better to have a stop loss, if we don’t know about the company. If we know about the company, or volatility is common in the stock, we can have a wide stop loss, I think ATR will help here. One can look at the volume too.

Losses always happen with pure technicals, however strong the charts may look, it is past and the next trading session could undo the past, particularly with stocks trading at ATHs. A 15% from ATH from investing standpoint is common, but a quick 15% loss might not be the same to all traders. And, If we are in a bull market, there will be new opportunities. I say this purely from a technical stand point, about price not value.

On another note, the position sizing cannot be big purely based on technicals unless experienced. And if the position sizing is big combined with fundamentals, we can look at a wider stop loss, and if the trade is taken for a few months, there is a chance of price not hitting the stop loss and the fall will be recovered.

As with FA, TA feels like a journey too. Feels like nothing much has changed when charts are looked at, but the lessons, experiences, and profits/losses happen. Fascinating, nevertheless.

I am in an early stage of learning, so I am all over the place, and there are gaps in my knowledge, wrong interpretations and inferences. Sharing for my own clarity and as it is relevant to what was asked.