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Strategies & Market Trends : TA-Quotes Plus -- Ignore unavailable to you. Want to Upgrade?

To: Howard R. Hansen who wrote (3379)	2/8/1998 1:45:00 PM
From: Shinin' Times	Read Replies (2) \| Respond to of 11149

Scan Trading Effectiveness Hopefully this will start a dialogue re. the subject of "Scan Trading Effectiveness", for the lack of something better to call it. First, a few observations: (1) One doesn't want to post or recommend anything less than what he/she believes to be a truly profitable scan. (2) On the other hand, if one were to truly possess a highly profitable scan, then one would be hesitant to post it as the effectiveness of trading the scan could be diminished if too many others started trading it. (3) A scan can be easily and truly profitable to one person, and something far less to another person, due to different trading styles. (4) I believe that there is no "magic bullet" scan. A good scan is, for me, the 1st step in the process of selecting trading "picks". Subsequent steps include evaluating current and historical fundamental data, evaluating technical data, checking recent news, checking internet message areas, sometimes calling the company, etc. If a good scan produces 10 - 15 issues, I may eventually end up with 0 - 5 issues as actual trading candidates. And then there is a good chance I won't trade any of them for various reasons. Second, a few thoughts re. how we may approach this: (1) rather than post a scan, perhaps it would be better to post the rationale behind the scan. (2) post some symbols which are the end result of the scan and subsequent analysis. (3) post a synopsis of the proposed trading for the issues. (4) post the results of the trade upon expiration of the trading period (unless too embarassing). Third, I'll take a stab at kicking this off: -- Scan rationale: General == ID issues which have a good chance of continuing "breaking up" from a low ebb. - Liquidity - no issues which trade too thinly. - Relatively low price. Need to trade high volume of shares for profit objective. - Current day range clearly above prior day range. The breakout. - The breakout is new, ie. prior days did not have similar pattern. - The breakout is supported by volume increase. - The breakout is occuring at a "low ebb" in the chart history. - Typical daily range should be sufficient to warrant profit objective. -- Trading (to test results): - Enter the issue at market on the open of day(+1). This will assume an entry price "open +1/8". - Exit the issue at market on the close of day(+3). This will assume an exit price of "close -1/8". - Use a round trip commission of $30 to calculate the profit / loss. NOTE: The reasoning behind the above is that none of us would trade (enter and exit) an issue the same way. ***The above rules provide consistency and reasonably accurate guesses at entry and exit prices. -- Just for Grins 8-), a couple of issues for trading tomorrow - 2/9 { Day(+1) } : BOBS and GTST. Candid feedback will be appreciated. Thanks ... Fred