Mover Mike

The Traders Blog has a post about finding stocks to trade or buy, a subject I don’t see often. The advice comes from The Wild Investor. Here are his six steps:

1. Reflect - Create a list of 50 to 100 of the past stocks you have either traded, watched, followed, or whatever.

2. Breakdown - Try to group the stocks for their activity or for the way they traded.

3. Classify Each Group - look at each before their gains. What did their pattern look like.

4. Trial and Error - After you have gone through all your different groups, it is time to test. The more tests you run, the better chance you have of creating a profitable search.

5. Practice Run - Most likely you want to see if your system works before you throw real money at it

That’s one reason I like the Triangle Trading System. You can look at a stock in hourly, daily, weekly and monthly with a flick of your mouse over so many so many time periods.

So you’ve looked at 50 to 100 stocks of the past. How do you find 50 to 100 stocks for the future:
Here are my tips:
1. Buy Investors Daily and read about their stock selection methods. A top rated stock would have both high relative strength and highearnings momentum.
2. Use a simple method like a point and figure chart to follow all 30 of the Dow Jones stocks. Chances are if Boeing or United Technologies is strong, the rest of the defense industry will be strong.
3. Follow the major industries, using point and figure charts or some other method to search for improving relative strength and invest in those strong industries.
4. Buy the leader and buy one of the most leveraged in the industry that is hot
5. Keep your eyes and ears open to new ideas, new stores, and new gadgets.

Tags: Investing //
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