Position Trading Strategy

Discussion in 'Strategy Development' started by sunseeker, Oct 31, 2003.

  1. I have been thinking about creating a slow trend trading method, which requires only monitoring once a day.

    Using parts of Jacks ideas combined with some simple inputs I came up with the following:

    - Weekly Charts
    - Long Trades only when EMA 140 is above EMA 290 on the weekly chart of the SP500
    - Define Sectors of the S&P 500 and only trade the strongest Stocks from each sector.
    - And trade only the sectors that are stronger than the Index.
    - For entry use Stochastics rising over 75 Level (J.hershey intraday method)
    - Combined with rising volume
    - Wait for Stoch to be entwined otherwise leave the trade
    - Use the right left channel for managing the position
    - Leave when Channel gets broken
    - Define initial risk when entering the position
    - position size in relation to the initial risk - the initial rist should be lower than 1.5% on the entire account.

    IMO this could be combined with parts of Canslim for the stock selection.

    What are your opinions on that? Do you think this could be successful or which parts are doomed to fail?
  2. lindq


    Essentially, with this strategy you would be buying strong stocks in the strongest sectors in an overall strong market.

    Now all you need is a crystal ball to tell you when all that strength will continue, and you will do well. But alas, without it, you will get hurt on any turn in the market. Buying strength can be a very risky deal in anything other than the strongest markets, and unfortunately the strongest markets are often best defined in hindsight.

    IMHO, you would do better to reverse your strategy 180 degrees and buy weakness during market weakness.

  3. Yannis



    I like your method but don't forget that there are several techniques out there that seem to meet your criteria. One of my principles is not to attempt to reinvent the wheel every time I need something. Not that I'm trying to sell anything, but, FYI, I've been using the information at www.pitbull.com for a while and like it. Take a look and let me know what you think.
  4. You buy weakness when the overall market is weak?

    What other popular strategies are there that deal with trading on weekly charts?
  5. lindq


    So long as the stock has strong fundamentals, absolutely.
  6. Very nice for employed person.

    For canslim, really tighten up on their criteria.

    One of WJO protoges has this down to a "T". He uses 25% for institutional ownership. Also triple the recommended on the principal's ownership. And be really tight on the 5 to 30 million float. He adds in the C&H analysis as very important. Since you are on weekly and C&H is a 13 week duration; this will be really slick for you.

    If you want to pick off the C&H 2weeks before they are announced, use Equations 1, ,2, and 3 (Change to weekly and nothing will screw them up.). And keep a list of each set of stocks they pull up. Do an running add and delete on the lists. (I have story board for this on wall). When the drop off you have a "buy" signal. Within six weeks you will have a rotating universe for evening analysis. The three separate lists will show good overlap. One list id "flashy (fast changes for price BO). One is smooth. The other gates through institutional trading (eliminates inst trading as a hazard) that would not let the stock appear on any list.
  7. you could use vectorvest for stock selection and program most of those criteria into a wizard/sort.

  8. Hi, I'm currently using TC2000 for long term stock selection. Has Vector vest any advantage over TC2000?