Well, heres the link to my plays for today (or Monday if they dont work out today). BTW, Voodoo, I finally learned how to post in the proper forum Good trading today! Alex http://www.elitetrader.com/vb/showthread.php?s=&threadid=2625
gemini - You won't believe if I tell you - those picks are based almost completely on fundamentals or better said : fundamentals transferred into ratios and using these ratios as measurement for the stocks / industrygroups longterm trend ( or non-trend ). There's no secret in it , because the QP 2 Warehouse tool does almost all the ranking work for you. www.qp2.com Once you get used to this approach, you'll be surprised, how easy one can predict how the chart of a stock will look like, once he has compared the various fundamental ratios. It also helps to detect either inefficiencies in the market ( not all 10.000 or so stocks are covered completely and every day by Analysts or the media ). It's a fairly simple approach to create watchlists, which may include stocks not everyone trades or hears about every day. I.e. for the "buy the dips " strategy, I scan my data base for stocks with high EPS strength, high group strength , high relative strength ( this is not the popular RSI indicator, though ). + some parameters like price + volume - don't want to trade stocks trading less than 100K shares a day on average, and the price should be between X and XXX $/share. Have a look at the charts of the symbols I posted above and you see what I mean. There are some stocks in this list, which barely reacted even on the sept.11th attack - at least not to the extend the broader market did. Investors have quite a lot of confidence in these companies - therefore the high strength and therefore, one can be lucky to get the chance to buy a dip in some of those stocks. For the " multiday to multiweek swings " I simply use a list of stocks with high EPS strength, but medium relative strength, placed in medium to high strength industry groups. I usually end up with a list of stocks which are swinging up and down in 10% - 30% moves over the course of several / days weeks, but are within a trading range. The group strength makes sure, to a certain extend, that the stocks industry is at least in favour to some above average degree. High earnings-strength makes sure, that there is some institutional interest in the stock. But the medium relative strength of the stock itself indicates, that investors are not yet fully or not anymore really convinced about the outlook of the for the company or the market in general - This stock may belong to category : interesting investment on the long run, but maybe not now. This mood or perception changes from time to time, so swings the stock's price. For the daytrading low- risk category: I' like to see EPS above average, groupstrength, relative strength in the upper 3rd of all stocks in my database, but not explicitely in the highest, momentum driven ranks either. I further look for sufficient liquidity, because a low risk approach includes, that you can get in or out of a market at any time you whish - if you have to wait for buyers or sellers , risk increases substantiallly. I consider high liquidity in a market as the most important aspect for the risk averse trader. Furthermore, you'll need at least a certain daily trading range, enabling you to make some profits from priceswings - but , in order to stay with a low risk approach, this daily range , or better ATR, shouldn't be too large either. So if a stock trades within a daily trading range of 3% - 5% of its shareprice, this would be fine for me. More important for me is, that the daily chart doesn't look to erratic in it's daily swings. Common criteria for most of my scans are, that a stock has to be at least in the upper 3rd. of all rankings - Earnings, groupstrength, relative strength ( again - not the RSI meant here ). These criteria narrow my complete stock-list down to maybe 300 - 400 stocks, out of total of 9.700 in my database. The scans mentioned above are only applied on these 300 - 400 stocks, so the final watchlist for each "strategy" will contain usually not more than 40 - 60 stocks, most of the times much less. These 40 - 60 stocks make up the permanent daily watchlist, witch is scanned for technical trading signals on a daily or weekly base. The daily scans can include simple signal alerts like MACD crossovers, MA crossovers, or pullbacks to support etc. . not too much different signal types. For further "finetuning", once a candidate has been selected for a trade, I do check the weekly charts and also the 30 and 60 minute intraday- charts for periods of up to 20 - 60 days ( I use QuickenQuotes live where you can pull up i.e. a 60 minute chart for the last 60 days and a 30 minute chart for the last 20 days ) I do not use Level 2 data ( for Nasdaq ), because I don't do much, if any intradaytrading. Hope this helped a bit.
Thanks from me too. Could you please clarify what you mean by "high EPS strength". I assume you mean earnings growth rate. Do you factor in P/E in any way?
Privateer, Sounds like a personalized customized variation of O'neils CANSLIM method of trading. I commend you for creating such a specific duplicatable methodolgy for your trading as I think we all aspire to "finding" our own niche as traders though it often seems so elusive.
Hi, as mentioned earlier, everybody has to find his own way & rules for trading. These rules have to fit in the traders personal live. I feel comfortable with my current approach after many trials and errors. Although I know, that especially in shortterm trading, fundamentals are of lesser importance ( some traders do suggest not to look at them at all ) it's my experience, that ultimately, all markets are driven by fundamentals , or better said, the perception investors and traders have about fundamentals. Since these investors are the power which moves ultimately the market for those periods I trade ( several days to weeks ), I'm not here to outguess them but rather to follow them for a little while. For what concerns your question regarding EPS - indeed, it's earnings per share strength. This indicator is built in in QP2-Warehouse. It's derived from the earningshistory of a company. Without giving an elaborate explanation here, I can say, it's in a way comparable to what IBD daily does. Steady and reliable earningsgrowth of a company over a number of quarters finds it's equivalent in a high EPS strength. Ultimately, reliable, high EPS and high ROI is what all longterm investors (especially the big money ) are looking for. If a company is able to deliver, it gets rewarded with steadily rising stock-prices - that's plain and simple basic investment knowledge. If a specific sector holds many of those companies - the sector gains strength, which translates in high group strength. There are times, when overall uncertainty in the market leads to pullbacks in stockprices of even the best companies. However, it's also fairly easy to see, that the pullbacks for these stocks are less extreme and most of the time of very shortterm nature. It has nothing to do with valuations ( PE ratio or so ). Most often, companies with high EPS strength are not cheap in terms of PE ratio. But Investors award consistent high earningsgrwoth with a premium - as long as the company is able to maintain this growth! Not surprisingly, most of these types of companies are found rather in the ranks of midcaps and even smallcaps then among the stocks talked about everyday in the news. These are the opportunities I'm looking for. You won't find one every day, and if you get one, you'll have to ride it as far as possible - until the next breakdown in market-sentiment suggest to take some profits of the table. Combining fundamental & technical analysis for ST trading is a methodology I found very appealing - and profitable - to me - therefore I stay with it OK, agreed - this methodology has nothing of the thrill inherent in daytrading ( which I liked very much when I did it ), but it's an approach to make money consistently. I like to say - in order to make money consistently, you need to find a market which allows you to do so - not some erratic market with ton's of surprises everyday. The mental stress inherent in trading these volatile stocks can grind down your mental strength to point where you start to make mistakes - and mistakes in the markets can always translated into losses. The odds are anyway strongly against the private trader, so why adding even more pain by trying to trade markets that have nothing to offer than substantially higher risk. OK - don't want to go to deep into details here. Everybody has to make his own experiences. regards &