THIS IS A COMPARISON OF THE
ORIGINAL UNFILTERED TRADING SELECTIONS VS THE NEW TRADE
These stats are based on the implementation of
a new filter described below for original system manual owners
and subscribers. Additionally we have added an
auto-update cut loss column to all trades to indicate where
stops should be located for maximum protection or profit
These are used to cull final selections
from the method taught by the manual.
USING FILTERS TO LIMIT
Those of you that have been
following this system know that we had the potential for about
395 trades over the last year. While better than 80% were
winners it still provided too many for any investor to follow,
let alone afford. I have spent the last two months divining a
simple culling process that gets us down to around 6 trades a
month, yet gets the closed trade percentages up above 90% and
takes average profits from 8-12% per trade up into the high 20
percentile. The time in trade has been increased (which gives
you more time to roll trades if you are trading options, thus
compounding gains), but still allows you plenty of profit
compounding turns per year. You will find that as strong
trends develop this holding period will reduce to an average
of around 50 days.
Eliminating all stocks that have less than 50 days until
earnings will be announced, and the "big one", only picking
stocks that have a 'CPM" (Current Price Multiple) of over
2.0....(Actually 1.96 as illustrated below). If you need to
reduce the number of stocks even further you can only pick
those stocks that are optionable (even if you don't trade
options). Optionable stocks tend to be more liquid and draw
more investor attention than those that are not.
insures that we have strongly accelerating stocks. The CPM is
simply today's price divided by the lowest price in the last
year. This Factor will be self adjusting on the following
basis. Every day we look at the CPM of the SP500 and
multiply by 1.5. That means as the SPX ratio fluctuates, so
will the CPM so that we are always evaluating performance of
the stocks balanced against the broad market indicator.
HOW ABOUT STOPS?
Probably the most asked question outside of why we buy
negative pre-announcements (as opposed to
selling or shorting them.
Because I use options to limit the risk, the
amount I put up is the equivalent of a stop. I am
prepared to lose it all because I am working on the 80% + odds
of winning overall. Those who do not use options should
follow the new recommended stops which are updated daily.
These are protective and trailing in nature and will keep you
from getting in serious trouble and/or protect your hard
earned profits from winning trades.
Here is how a sliding scale works:
1. For stocks from $5 to $10 a 1.50$ trailing
stop 2. For stocks from $10 to $20 a 3$ trailing stop 3.
For stocks from $20 to $30 a $3.50 trailing stop 4. For
stocks from $30 to $40 a $4 trailing stop 5. For stocks
from $40 to $50 a $5 trailing stop 6. Above $50 pick a %
drop, (your comfort level-7 to 10%),from the highest price
that the stock achieves during the time you hold it and place
a stop updated as required.