Nope, sorry, no proven system. Problem is to do what you suggest with regard to trading patterns of the stocks would require an ample amount of knowledge and time to judge the best entry points. I try to look for recent lows out of say a month or so on the companies that I keep an eye on. These wouldn't be all time lows, but lows lower than the norm over the course of a month of trading. To try and make this determination, I keep a daily log of the close, range, and volume. As an example, I follow BOBJ. About three days ago, it hit a low of just above 17 after having traded in the 30's a month ago. The stock slowly fell downward without any apparent reason other than perhaps the fact that it just wasn't going up. Maybe it was a top, maybe another reason entirely, but it wasn't anything I could find in the news releases.
The stock bottomed briefly at around 23 or so, and then ran back up to around 30. Fell back again to an even lower point. A ridiculus point, IMO, since the analysis or earnings outlook hadn't changed. The stock has been up the past two days. I would have probably sold today, but having no position in the stock, that would have been difficult.<g> Unfortunately, I'm tied to two other stocks at the moment which have yet to hit my exit price. Once they do, I cash out, and wait for the next ridiculus low and start the process all over again.
I try to keep tabs on about 20 stocks, mostly techs. And after logging the criteria on a daily basis, this gives me a base from which to seek out my next investment opportunity.
Of course, I do have my weaknesses, too. I can also fall in love with a stock and make some idiotic buys based on enthusiasm and past experience. I recently ate a healthy loss because I refused to believe what was so obvious, that management was screwing up. Hopefully a short term glitch.
Not the best by any stretch, but certainly not the worst. Experience is a great teacher provided the student is willing to listen. I just keep trying to prove the master wrong.<gg>
Just for the heck of it, pick about 5 or 6 stocks and keep a log on them for say about two months. Pick stocks with differing market caps. It would only require 3 sheets of paper and probably no more than 15 minutes at the end of the day. Just watch them without investing. I think you'll get a general idea about what I'm talking about.
Mike |
