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Strategies & Market Trends : Strictly Buy and Sell Set Ups
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To: sixty2nds who wrote (8599)3/25/2006 12:22:54 PM
From: chowder  Read Replies (2) of 13449
 
>>> I don't like the sub $5 or over $20 stuff but... <<<

Speaking of price ranges for stocks, let me tell you a secret.

One of the advantages of keeping a trading journal is that over time, it reveals things you don't normally pick up because of a bias or prejudice we may have about the market.

Here is what my journal told me, and I had no idea of this prior, TA works best for stocks on the NYSE priced over $40.00 per share. The success rate for stocks above this price range were exponentially greater than stocks under this price range.

For example, and this can be easily verified, of the long term trades I have played in the long term portfolio this year, NYSE stocks priced above $40.00 at the entry have a success rate of more than 85%.

TA worked best for stocks listed on the NASDAQ priced above $20.00 per share.

Keep in mind, this took a couple of years worth of information to determine this, so I know there's a trend here. Therefore, I eliminated low priced stocks from my scans and will very rarely play a low priced stock. I have found it is better to buy a higher priced stock, one that attracts professional and institutional money, even if it means I have to buy fewer shares.

Just passing it along as a FWIW.

dabum
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