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A stock's Stop is computed from a 13 week moving average of its closing prices, and is fine-tuned according to the stock's fundamentals. High RV, high RS stocks have lower Stops, and low RV, low RS stocks have higher Stops.
VectorVest gives a Sell signal on any stock whose Price falls below its Stop-Price. This is done because it limits downside risk. It is the best system we know for protecting profits and preventing disastrous mistakes. If, for example, the average Stop-Price of a portfolio is 10% below its average Price, then the total downside risk is 10%. Very few investments provide this degree of safety.
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