Go with the WINNERS

Discussion in 'Strategy Development' started by vetten, Apr 6, 2007.

  1. vetten


    hello folks,

    I have been wondering about a strategy to go with stocks which are in an up-trend.

    For liquidity reasons choose from the S&P500 stocks and scan for stocks that have gone up the most in the last month.

    Have a look at the chart that the stock is in a steady uptrend and prices are not all over the place.
    Maybe choose stocks over $ 20 to keep broking costs down.

    If you have $ 50,000 laying around, buy the 10 top stocks @ $5,000 each. Broking costs will be around $1 per trade with IB.

    Stop loss quite strict at 3-5%........after all we only want the stocks that almost immediately go up more.

    The next day after the market closes, have another scan for stocks that have gone up the most for that last month.
    If one of the 10 stock disappears out of the top 20 (to give the stock a little moving space) replace it with stock no 10.
    Also replace the stocks that have been stopped out.

    The next day after.....................

    All stocks are sold when stopped out or leave the top 20 stocks.

    I have a feeling that this system after sharpening up might produce 30-50% in profits per year.

    What I like about a system like this that it is a EOD system, so that I dont have to be glued to the screen all day.

    I sure dont want to reinvent the wheel, so is there anybody that trades a simular system?
    Anybody that did backtesting on a simular system?

    thanks guys and dolls