How to Find Winning Trades/Investments:
The focus of this board is on trading and investing as a managed business. Everything I report here will also apply to penny stocks and high-flying volatile stocks. However, what I want to encourage is conservative, consistent trades and investments because 80+ percent per year is possible with peace of mind. This frames my answer to you.
There are ways to perform automated searches for exactly what you're asking on stockcharts.com. At some point, I will publish some code you can just plug in. Honestly, though, this is a low priority.
Here are a few rules that will align your work with the winning forces of civilization and will put you above the Wall Street noise and beyond fears of manipulations, tricks, and traps.
1. Seek prices that represent the broad, deep, winning forces of civilization. Part of that search may include the popular, what is currently hot, but in the end, reliable is better than hot. Speaking of hot, what's cool is my methods work with the most volatile high flyers. But high flyers will be much more exposed to manipulations, tricks, and traps. That includes FAZ--a dangerous vehicle that I probably shouldn't have mentioned. There is simply no need whatsoever for that kind of power--except under the most exceptional circumstances when a buy might be warranted. NOTE: The higher the return potential, the higher the risk, and over time and the course of 100+ trades, high risk will take you down.
2. Collect stocks and ETFs like gems until you have a stable of perhaps 12 that fit the above description. Would love to have several people working to build this collection. Stocks aligned with the deepest, broadest cutting edge of civilization now, that stand in the way (Buffet's mindset) of an unending river of money. We want to own what is bigger than this season and more powerful than Wall Street and the government. Investors Business Daily is one of the best sources of information going. An amazing publication.
3. Watch the Hurst cycles (the best in my opinion even though they are sometimes difficult to discern), and trade and invest primarily off major cycle lows. This will increase the probabilities and the percentage returns. Buy high probability and low risk. Exit low probability, high risk. (Would love to have some regular Hurst analysts publishing regularly.)
4. Learn to recognize basing prices. This will minimize false starts. Will be publishing charts showing basing patterns. Then focus only on buying these bases.
5. Consistently follow your 12 stocks or ETFs, and know everything about them. Then compete your 12 against the universe of opportunities. If you find a vehicle better than one of your 12, dump your weaker opportunity and replace it with the stronger. Always align with breadth, depth, and strength. There are ways to put numbers to these words. (Would love to have a contributing writer who understands the importance of fundamentals and how to apply them.) Fundamentals will add to the accuracy and consistency of your stats. So we want to find the vitality of civilization in the numbers (the fundamentals) and add it to the life force of price (the technicals) as measured by the moving averages (price above up-sloping lines). Will be publishing some fundamental rules of thumb if someone doesn't beat me to it.
6. Trade and invest with the market (you want the wind at your back). This is essentially the same thing as points 3 and 4 above. Why? Because most stocks follow the market, and most will base with the market, and the market will often dip and base at major Hurst cycle lows. [Take a simple chart with 10 and 20-day ma's only, and start plugging in stocks. See how many are similar to LNN or the market coming off the March 9 low. Look for similarities and differences. Notice which were the best and strongest. Then look for the best and strongest for future trades.] The point is this: The *real* entry points (high probability, low risk, high return) will only show up a few times a year (every 10 or 20 weeks). So there is no need to chase the next stock that's crossing up--unless you like stress and chasing and risks (that's a personal choice). So I'm encouraging following just 12 or so opportunities throughout the year and trading or investing as they present great opportunities. In this way, your percentages will soar. You will make fewer mistakes, and you won't be swimming upstream trying to recover from losses. You will enjoy high returns with less effort. Let's enjoy life!
7. Know and visualize the kinds of vehicles you would like to trade and own, and then be open concerning how that information comes to you. It will come in amazing ways--and often through the most unlikely sources. Watch for a glow around the company or sector. It will almost feel like it's talking to you. Pay attention to these signals, do the research and verify your instincts. I experienced just this with KOPN back in 1999 when it was $15 a share--just before it launched to $200. KOPN came to me while attending a meeting having nothing to do with investing. A guy I barely knew (who did not know of my interest in the market) said, "Ted, I don't know why but I just feel compelled to share this with you. I don't normally offer stock tips, but this seems important." Strange but true. That's where my investing career began.
Ted
Strip price to the barest data that tells us BUY, HOLD, or SELL.
