No, I don't use the 3-screen method, as Elder suggest.
I first go to several web sites to gather a pool of stocks that are trending (Hardrightedge.com is especially useful for this). I look at volume breakouts, price breakouts, new 60-day highs/lows, new 52-week highs/lows, earnings surprises, etc.
Then to the daily charts. I look for a strong, 3-6 month trend that has paused (dip, rally or consolidation), and is showing signs of resuming again.
Then I check the oscillators to confirm both the strength of the general trend, and the weakness of the countermovement.
Finally, I'll go to the intraday charts to get a feel for whether I am jumping into strength (what I want), or into weakness (what I want to avoid).
Exiting is primarily a matter of intuition, at this point. And that is what I am working on now. I went back and backtested all the trades I made last Fall (August-December). My account in that period was only up 24%, about like the market itself. But had I exited more carefully, I would have doubled that. I am now looking at Williams%R as a tool for determining exits. Stochastics, it seems to me, are less reliable here.
TC. |
