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Strategies & Market Trends : Befriend the Trend Trading -- Ignore unavailable to you. Want to Upgrade?

To: Dr. Stoxx who wrote (2147)	10/27/1998 3:28:00 PM
From: Ken Adams	Respond to of 39683

TC, Beautiful call on SLE! I hope you got some of this. I've been out of touch myself for about the same period of time, but still right here at home. Glad to be back and good to have you back. Question. Have you shortened your time frame for Stochastic. I note the Timely link you posted still shows stoch heading south, even as price has turned up. What did you use for your signal here? Ken

To: Dr. Stoxx who wrote (2147)	11/1/1998 4:20:00 PM
From: Dr. Stoxx	Respond to of 39683

Nice response to the SI article! Welcome all thread newcomers. And thanks for the support from you thread regulars. We do have a good thing going here, and hopefully it will only get better. For the newbies, here is a recap of the "old rules": 1. Select well-traded stocks that have been in a strong trend over the past year to 18 months (higher lows for longs, and lower highs for shorts). 2. Wait for a significant pause in the trend, indicated either by chart formations (triangles, zig-zags, flags, channels) and/or momentum indicators (Stochastics: near 25 for longs, near 75 for shorts, but consider anything near 50 if all else looks good). 3. Enter the trade when the trend resumes (Stochastics cross above 25 for longs, below 75 for shorts and/or chart formations are broken). 4. Set stop loss at a comfortable level, depending on you risk tolerance and length of trade (I use 8% normally, sometimes more). 5. Exit when stop is triggered, or momentum indicators turn against, you, or your profit target is reached). Here are the "new rules" (added to weed out "false friends"): For longs, aim for an EPS of 80 or better and a RS of 90 or better, as judged by the IBD figures. Preferably too, there ought to be strong earnings over the last 4 to 6 quarters, and the issue ought to be in a sector that IBD ranks as B or higher. As for shorts, I haven't yet decided what to add here. It seems to me that simply looking for low EPS and low RS is not sufficient. The best gains going short, it seems to me (and this is from one who has very little experience going short), are made in issues that "top-out" after reaching 99 RS. Maybe a good thing to look for would be those "99-ers" that suddenly drop a couple of points, combined with an EPS figure below, say, 70 or so. Just a thought. Right now, I am not very concerned with going short. More in a moment. TC.