Stock Screening

There is no pat answer to this question.   We do start with a universe of 9000 stocks.  We are looking for stocks that are moving or on the verge of an anticipated breakout for a significant run-up/run-down.   Clues for obtaining stocks to trade come from such diverse sources as

There is no problem in quickly coming up with a fairly extensive list.  They are further screened by:

  1. Liquidity - Stocks must have a daily volume of 300,000 shares.
  2. Volatility - Stocks must have a volatility of at least 3%. This is obtained by taking the average range divided by the price.
  3. Movement - 50 day range must be at least 5 atr.
  4. Potential profit to loss ratio must be at least 3/1.

One can quickly narrow the scope down to about 50 tradeable stocks which are placed on our watch list.  These markets are then visually screened for pattern set-ups as outlined in our book.  We first look at the big patterns via the weekly and daily charts.  Orders are then placed at critical chart levels.

Hypothetical performance results have many inherent limitations. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program.

The information contained herein is subject to change without notice and was obtained from sources believed to be reliable, but is not guaranteed as to accuracy or completeness. Those using the materials for trading purposes are responsible for their own actions. No guarantee is made that trading signals or methods of analysis will be profitable or will not result in losses. It should not be assumed that performance will equal or exceed past results.

Trading stocks on any program/system may result in the loss of capital.  Do not trade with funds that you can't afford to lose.