Here is one approach I use:
Screen for a strong A/D uptrend with a 30 day ATR downtrend and then go through each entry looking at the yearly and weekly chart for the overall trend. Also filter where the average 65 day volume is high enough for good liquidity. Then look for support and resistance lines for target prices expecially points where dojis are present.
Bought FTBK on 9/15, sold today for 96% return.
Bought AMFI on 9/16, currently up 62% from my entry date, will probably sell tomorrow.
IBD identified RINO yesterday up 14% and up 5.63% today.
VISN came up on my screen yesterday. (up 12% today)
Not everything is a winner, but the ones that do go up more than make up for the ones that don't always work.
UUP looks like its coming back from its low.
Good luck.
I thought I would share a screener that I commonly use.
If you go to Barchart.com, you'll see the top performing stocks for the day.
Get the Price Advances or Percent Advances list somehow and dump it into your trading tool. Look for stocks that have new highs as well as an uptick in the Accumulation/Distribution chart.
You can also filter your list even more by looking at stocks that trade an average volume of 200,000+ shares a day. (Depending on how much you buy I suppose).
I use StrategyDesk, sometimes NinjaTrader, for my trading. I'm guessing most brokerage firms have some kind of tool to do this.
Look at support/resistance lines for new target or go to Yahoo finance and enter the ticker. The Summary page will give you a target price most analyst agree on for the year.
The list will still be long so you can add additional filters to reduce the list. (Like ignoring stocks that are below the 100d EMA)
Read the charts to find the ones with the most potential.
Even when the market is down, there is always something that is going up so you don't necessarily have to short.
Good Luck.
I see your using the classic "bet the farm" approach. I remember those days.
You can also consider this alternative approach.
Look at the price swings of the stock and buy X number of shares based on an average of the price swing (Average True Range). The more volatile the stock, the less shares you should own.
ATR is discussed at
http://stockcharts.com/school/doku.p...e_true_range_a.
The problem is that the pros (aka Ryan
) know where most traders will put their stops (price to sell if the stock goes the opposite direction that you expected to go). They can short a million shares to make it go down triggering all the stops and then buy back 2 million shares to make it go way back up. As a result, you get booted out and he takes your shares. The idea is to keep your stops really far away.
This approach makes all your stocks evenly weighted in your portfolio so no single stock will kill you if it goes down hard.
The formula is:
[Your Portfolio Amount*(Percent Risk)]/
(Yesterday's Closing Price - Stop Price)
Stop Price can be calculated as (Closing Price - 4*(N Day Average True Range (ATR))). The ATR can be computed using a spreadsheet and most trading programs can do this automatically. (I use a 10 day ATR).
For CWEI the 10 day ATR is 1.08 and last Closing Price was $19.27
Stop Price (price to get out regardless): ($19.27-4*1.08) = $14.95
Say you have $100k total portfolio amount and you want to risk no more than $1000 of loss for a single stock (risking no more than 1% of your portfolio).
For CWEI, it would be
($100,000*(0.01))/($19.27-$14.95) = 231 shares
or ($1000,000*0.01)/(4*(10 day ATR)) = 231 shares
That comes out to be (231*$19.27) = $4,451 for that trade. If the price goes down to $14.95, you will sell and lose at most roughly $1000, exclusing slippage and commissions (which could also be factored into the formula).
One other thing to mention is that if the ATR is very small, the share value can get very large to the point where you are essentially betting the farm. If the ATR was 0.25 instead of 1.08, the calculated shares would have been 4000 shares totaling $76,000.
To fix this problem, limit no more than 10% of your money on a single stock. By capping it at 10%, you limit your risk at $10,000/$19.27 = 518 shares.
So calculate the shares based on the ATR and the 10% rule and take the smaller.
Most programs and spreadsheets can do this automatically so you don't have to waste your time doing it by hand.
This is one approach to managing your risk. Now you just need to find a trading style and trading strategy that your comfortable with.
Good luck.
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