Wood's float analysis

Discussion in 'Strategy Development' started by Disqplay, Jan 28, 2006.

  1. Disqplay


    Does anyone here use or at least attempted to follow this theory of taking trades in the market? I purchased his book, read it and alot of what he says appears to be correct. After purchasing his book I also bought a program called stocksharev2 which was the only one I could find that had a float analysis plug-inn. I have been working with it for the last 6 months trying to figure out how to get a better edge on trading using this method. After trying many many different scans for stock that would give me a chance at seeing this method in action I think I have found what works for me at least. I realize that I do not have enough money in my trading account to go full time but still it does seem to work. I have taken 4 trades since January 3 and all four have been winners. I have netted returns of $240.00, $325.00 $240.00 and $180.00 on those four stocks. Considering I trade only up to an amount of $4000.00 per trade and hold no stock more than 10 days I think this is pretty good. Curious if anyone has any thoughts as to how to get higher returns. It should be noted that I have no viable intrest in either his book or stocksharev2 program, also looked back and tested over 200 stocks over a 5 month period prior to trading with real money. The results of the backtest were 153 winners 2.5%-16% with 47 loser with a max loss of 3% which is a number that I use as a stop loss in all my trades.


    PS Love the site
  2. I personally don't understand this concept of stock ownership turnover. So does it work: pick up arbitratrily any day, add up the volume cumulatively starting this day until it equals to the float and you get yourself change in the stock's ownership and therefore change in trend direction? This does not seem to me like a mathematically sound claim. I doubt also that even statistically it's true. Unless I miss something.
  3. how much are you paying monthly for stocksharev2?
    i've seen the book, never read it cover to cover, but the concepts definitely made sense.
  4. Disqplay


    Well don't really know if it will work over the long haul but has been doing ok since I determined which scan to use. My understanding from the book and from using the plug-inn is as follows:

    1) Stocks while trending up or down will do it in conjunction with a float turnover. ie if the price makes a new high for the year it is usually on the day it reached the end of a turnover. If it reaches a new yearly low then it is at or around the time it has reached a turnover.

    2) Trending stock tend to stay in the trend for a period of time.(When they reach a new high or low usually the volume will be 15% greater than the average volume (65) and increasing.)

    3) Looking back at historical data the new year high should be well below the price high for the last 5 years.

    4) Volume should be gaining over the last 3 days as price increases.

    5) In conjunction with this I also look at sma 5 34 65 for closing price and if sma 5 crosses sma 34 from below I will take the trade for a short time.

    Don't know if this helps but seems to work for me.

  5. Its more complicated than that. I own the books, the program, and I traded it myself, tested it manually, but the problem is ultimately you choose the entry and exits, making the program subjective. Its a good tool to short a bounce at the 50% float line, it has about 50% chance of succeeding with a big reward 10-30% for 7% risk.

    However, I wanted entries and exits made for me and Ive found that my own systems developed without regard to float were much better than the returns of float analysis. The other problem is that Steve advertises himself on TFNN and the accuracy of calls is pathetic by guys like Tom O'brien. And you have to sit at home all day to try and trade the way Basil Chapman does his chapman wave, which doesn't really hold weight.

  6. Disqplay


    Once you purchase stocksharev2 there is no monthly charges, the data used by the program is either yahoo or msn. Wood float turnover plug-in seems to me was $199.00 to be added to the program but I think that it is worth it. The program does not do the scans you have to do it in another program or web base site such as stockfether.com or stocktables.com for example.

    You would scan for like stocks making new yearly high or new yearly low. I make my list short by concentrating on stock in 2-5.00, due to the limited funds I have to trade and then plug them into stockshare review the charts and decide to take a trade or to watch it for the next set-up that appeals to me.

    I hope this answers your question.
  7. bgp


    thank you for sharing your method .