Summary
This email announces that the stop loss on UMB Financial (UMBF) was triggered after price fell below $121, prompting an exit from the position. Phil Anderson uses the occasion to explain two practical risk management principles derived from the Mexican Pete pattern: how to set stops using the pattern’s most recent higher low, and why a stock re-entering the pattern after a breakout signals weakness and warrants an exit.
Key Claims
- Stop losses for Mexican Pete positions are typically placed at the most recent higher low within the pattern prior to breakout — confidence: high
- Initial stops generally range 8–15% below entry — confidence: high
- A stock re-entering the Mexican Pete pattern after a breakout is a sign of weakness and signals the position should be closed — confidence: high
- Prior resistance at the breakout level should convert to support on any back-test; stops are set slightly below this level to allow for back-testing — confidence: high
- Asymmetric return profiles (large wins, small losses) do not require a high win rate to be profitable — confidence: high
Mex Pete References
- UMBF (UMB Financial): Stop placed at the most recent higher low within the Mexican Pete pattern; initial stop ~8–15% below entry; breakout level expected to act as support on back-test; stock re-entered the pattern, confirming weakness and triggering exit below $121.
- General principle stated: the strongest Mexican Pete breakouts never re-enter the pattern; re-entry is a reliable exit signal.
Stock Picks / Signals
- UMBF (UMB Financial)
- Signal: Stop loss triggered / Exit
- Stop level: $121 (price moved below this level)
- Outcome: Position closed per model portfolio rules
Predictions / Forecasts
None
Notable Quotes
“A stock that reenters the pattern is a sign of weakness and the market’s message that we should move on from a position.”
“That’s the secret to winning big in the stock market without needing a high win rate.”