Selection Criteria for Stocks that Go Parabolic

Discussion in 'Trading' started by darvasboxes, May 24, 2005.

  1. I am in love with stocks that are able to make explosive moves. This concept are mentioned in many books and websites: Nicolas Darvas's "How I Made $2 Million in the Stock Market", William O'Neil's classic book " How to make money in stocks", etc.

    I am impressed with the concept but having difficulty to narrow down the right candidates.

    Personally I am using the following as my selection criteria:
    Min Price=$4
    New High selected...
    New 5 Years Highs are preferred

    But the results are not as good as I expected, anyone here mind to share his/her "High Momentum Search Strategy"?

    Thanks in advance!
  2. Use a rabbit's foot and rub vigorously.

    Good luck,
  3. avadon


    Special situations create this and a combination of factors is what makes things explode. NasdaqSC based stocks (about 640 total atm) are the only ones that I've seen over the past 8 months that ever go over 40% which is probably (an assumption of the primary factor) because of the low float. It's weird, like VEXP moved 220% when it had the 2nd lowest float of all the NasdaqSC's yet now it's like the 30th or so with the lowest float. So the company issued new stock the past couple months.

    I've found that it appears to be easier for me to only trade NasdaqSC stocks compared to NasdaqNM issues, but that could be a false perception. When stocks move tons they are usually in the 1000's% daily volume vs 3 month avg. It's tricky tricky keeping your mind in the right frame that it needs to be in to trade though. I'm just starting to "get it" (break even) after busting my ass since last October losing and rearranging my life to where I can change careers. I can feel the invisible line in my head of what it takes to trade now... like when I'm trading I've started being able to identify the feelings that screw up my trading and I force myself to bounce back into the logical emotionless/not care about some huge profits state of mind. Like if they happen, they happen but I can't *make* them happen through my trading.... I just have to accept the opportunities that the the market gives me and not try to hope or make it do what I'd prefer it to do, etc.
  4. avadon


    I think that what you are looking for only happens roughly 10 times a year (watching all the Nas stocks). But then, that's if you're daytrading.
  5. ==============


    Already found them ;
    high vol stuff like QQQQQ,
    parabolic stop,
    dont like the parabolic stop/reverse on a strongly trending parabolic [meaning cone shaped] move .

    Wisdom is the principal thing.:cool:

    May happen 10-12 times a year;
    may not.
  6. Actually, I just do a scan for stocks that have doubled in the past 1, 2, and 3 months.

    Stocks that go parabolic double many times - so if I catch something after it doubles from 2 to 4, or 3 to 6, that is where I start my analysis.

    Good luck.
  8. why not just include a scan for stocks with high short interest?

  9. So you started the best thread in 6 months.

    Beginners should only trade what they know. And when a person begins, he can only know a very little.

    This is not a dilemma like irrational thinking etc...BUT.......

    If I were in your mental shoes, I would try to think like a detective.

    I happen to have both of your mentioned books and got them from persons in the trade associated with each author. The answer you want is available and a very rich solution to follow.

    Be a detective for a moment.

    The evidence that you state can only be used after the fact to make money on the burst you are seeking. No matter.

    Change the set of criteria for finding what you want. This is very difficult and your stated evidence list will draw flies like sugar or shit (you see the two groups who showed up).

    You need to find the set of data that singularly applies BEFORE the burst occurs and, BEFORE means JUST BEFORE. There is another data set as well. Since I will give you all you want, it is also a good idea for me to give you the other things you do not know you need as well.

    This stuff is where I caused myself to get a lot of SEC citations that, in turn, had to be retracted as SEC mistaken identity related to insider trading of multiple accounts ahead of market bursts. Sort of good stuff for making money but bad stuff because your number comes up at SEC and you may have to deal with that until they get it straight.

    Most people like to pick easy ways to make money. You picked the very best one for beginners because it gets you a lot of money fast and then you have more than you will ever need and you can do anything you want from then on. Obviously you continue in the same vein adding more knowledge, skills and successful experiences.

    So you need three things: A set of data that tells you a stock is going to burst; a set of data that lets you hold the entire burst and a set of data that gives to the exit at the end of the burst.

    I worked this out many times over 50 years. I paralleled Darvas silently. Currently it has become a 5 second job. Do a sort where you control the length of the list you want to a minimum but just large enough to handle the three factors.

    All the details and the track record stuff is in Spytrader's journal.

    Also look up the scoring thing I do so you can know where in the cycle you are easily. 3Q's ae answered there.

    You can also pick up the record keeping log at the MSN site.

    Finally, before Darvas back when the ticker tape used to run incessantly in the broker's lounge (stuffed leather chairs and the wall chalk board times), there was a deep convention that was followed that related P and V. Making money then was simply a "sound" experience. So get steeped in the P, V relation and the corrolary I made up to complete it. (See MSN site)

    While I am denigning you the most important experience you could every have, maybe it is not that important.

    The experience is recognizing that your data set is one set too late in time and that you need the data set one set ahead of yours. So I am giving it to you and throwing in one more so you have the money making half of the loop. This new set to you is difficult to figure out and to fathom. But had you had the chance, you would have stepped into Wizard land IMMEDIATELY. It is the damnest experience you can imagine.

    Nice post. Most people cannot learn that making money in the market is a job of anticipating rather than predicting. It is all founded in the Boy Scout recommended orientation. Be Prepared.

    All those merit badges are the best educational elements ever made available in the world.