Practicing Stan Weinstein's Method

Discussion in 'Journals' started by traderprg, May 28, 2014.

  1. I forgot how I got into a trading. But I remember being excited reading Stan Weinstein’s book a few years back. I dream of employing Stan’s method to screen stocks that are stage 2 breaking out with huge volume.

    Late last year, I jumped back to the screener idea as soon as wife said she is pregnant. With the goal of getting supplementary income, I started trading stocks in the US market last November with a fund of 14k.

    Time is limited so I mainly review my orders and run the screener in weekend and let the sell-stop work through the week. I keep an eye during the week to update sell-stop if necessary.

    My total trading experience has been around 12 months. Currently holding 4 stocks plus cash, total worth of 18k. see screenshot.

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  2. Had sell-stop 1.72 for MPET based on the trendline. It was triggered yesterday.

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  3. Set a sell limit around 12.40 for JGT based on the swing rule - peak around $11 in july, low $9.6 in Feb. 11-9.6+11 = 12.4 which surprisingly match the 2012 support.
     
  4. Done weekly review and screening (surpisingly nothing stands out for stage 2 breakout. So no new orders planned). Updated my sellstop.

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    And surprisingly this week screener didn't return any result.
     
  5. JGT has been slow going. From an opportunity cost point of view, it is not worth it. I have raised the sell-stop to 10.88 of the last Oct resistance level. I will dump it next monday If there is a stronger stock to choose from the screener result.

    SYPR has been doing well - growing 40% after I purchased it nearly 2 weeks ago. It's a typical pick from Stan's rule: strong volume during the breakout and large base formation from a year and half ago ( the bigger the base, the greater the upside potential). Initially I had a urge of selling 1/4 position around support level in July of 2012. But SYPR has been going strong with volume and still in early stage 2 and I am willing to risk a little bit in this situation.

    HGT.. I am still holding it with a very tight sell-stop to limit my loss. Originally bought 600 shares, sold half shares near the peak before it came down with a correction. The reason I am holding it is because it still has a strong rising 30 week MA and the pullback has been happening on average volume. We will see what happen till next week.

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  6. I’m also a fan of Stan Weinstein’s. What I remember about his method was that he used the 30 ma to make trades.

    What are you looking for to enter a trade?

    I modified his method a bit and it kept me out of the 2008 downturn.
     
  7. My screener follows Stan’s method:


    1. 30 week MA is mostly flat or turning up
    2. Large base formation - at least one year so there is no near term resistance
    3. Huge volume spike - volume during the breakout week should be at least 2-3 times of previous 4 weeks
    4. Limit sell-stop ~10% from the entry level in order to lower risk.
    SYPR is one of this example. Or my previous orders since last December: CADX, MSO, MPET, HGT
     
  8. llIHeroic

    llIHeroic

    Consider that it is possible to know that the sentiment of this stock changed far before it came anywhere near your stop. If I read the chart from left to right, it tells me to short on 5/13 mid-day, and cover it on 6/2.
     
  9. Thanks for you comment.

    I think your chart make sense and the strong volume appeared on June 2nd confirmed it. Will keep that in mind and validate it further.

    I have yet to practice shorting using Stan's method and it will probably have to wait as my time is too short ;-)
     
  10. Work has been busy...

    A few things changed:

    Changed to use GTC from GTD to avoid sell-stop expiration.

    Sold JGT as mentioned previously for lack of action.

    SYPR reached high $6.5 last friday then quickly sold off. The high is within the 2012 resistance zone. From the chart, SYPR was overextended with price increased in a very short time and doubled 30W MA. A correction is bounded to happen. In retrospect, A sell-limit for part of position maybe a good strategy. I have set a sell-limit to validate this.

    My screener matched the first stage 2 breakout since last week - REDF. It had huge volume spike with more than 1 year and half base formation. Resumed buying with 1000 shares.

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    #10     Jun 10, 2014