I had started trading for real in small amounts earlier last year and was doing reasonably well. However I stopped in June since I felt I didn't really have the confidence to deal with the impact of the "credit crunch" on the equity markets. As a result I've lost my way.
My approach is simply to eyeball as many charts as possible looking for breakout opportunities from areas of accumulation / bases. No indicators, just price and volume. Once I spot an interesting chart pattern I put the stock in a watchlist and then track the progress of all the potential candidates on an EOD basis. I try to understand the character or balance of price, volume, supply and demand based on the information I've found in these forums.
The problem I'm trying to get to grips with is where to look to obtain potential candidates for my watchlist. As a minimum I filter stocks based on a closing price between $5 and $30 and a 90 day average volume greater than 500k. For example, on Friday this gave 6 candidates in the DJ-30, 41 in the NASDAQ-100, 164 in the SP-500, 517 on the NYSE exchange, 386 on the NASDAQ and 20 on the AMEX, 5 in the Regional NorthEast Banks sector, 2 in the Oil and Gas Pipelines sector etc. etc. etc. you get the picture.
I don't understand whether one particular group of stocks either in an exchange, an index, an industry or based on some fundamental criteria are any more or less likely to be candidates for professional accumulation and distribution cycles, e.g. are DJ-30 stocks so widely traded that these types of opportunities are simply lost or averaged out in the myriad of different tactics and strategies being used? Should I be looking in the Small Caps to find the "next big thing"? Or does it just not matter?
One option is to just concentrate on and analyse the same set of stocks every day. I have time to study up to 10 stocks in depth each day. Rather than looking for a single setup opportunity based on break out from accumulation, expand my armoury so I understand the character of each of these stocks and have different tactics and opportunities for entry. Comes back to the same thing though....how do I choose this new group of stocks. I was thinking along the lines of narrowing down SP-500 stocks by looking at those which did not move in step with the main index. This could be based on relative strength or beta, with the rationale that action is occuring in these stocks which is not related to wider market conditions.
Any ideas / views / approaches that work for you? Are one group of stocks more or less likely to be suitable for P&V analysis than any other?
Many thanks in advance,
Richard
My approach is simply to eyeball as many charts as possible looking for breakout opportunities from areas of accumulation / bases. No indicators, just price and volume. Once I spot an interesting chart pattern I put the stock in a watchlist and then track the progress of all the potential candidates on an EOD basis. I try to understand the character or balance of price, volume, supply and demand based on the information I've found in these forums.
The problem I'm trying to get to grips with is where to look to obtain potential candidates for my watchlist. As a minimum I filter stocks based on a closing price between $5 and $30 and a 90 day average volume greater than 500k. For example, on Friday this gave 6 candidates in the DJ-30, 41 in the NASDAQ-100, 164 in the SP-500, 517 on the NYSE exchange, 386 on the NASDAQ and 20 on the AMEX, 5 in the Regional NorthEast Banks sector, 2 in the Oil and Gas Pipelines sector etc. etc. etc. you get the picture.
I don't understand whether one particular group of stocks either in an exchange, an index, an industry or based on some fundamental criteria are any more or less likely to be candidates for professional accumulation and distribution cycles, e.g. are DJ-30 stocks so widely traded that these types of opportunities are simply lost or averaged out in the myriad of different tactics and strategies being used? Should I be looking in the Small Caps to find the "next big thing"? Or does it just not matter?
One option is to just concentrate on and analyse the same set of stocks every day. I have time to study up to 10 stocks in depth each day. Rather than looking for a single setup opportunity based on break out from accumulation, expand my armoury so I understand the character of each of these stocks and have different tactics and opportunities for entry. Comes back to the same thing though....how do I choose this new group of stocks. I was thinking along the lines of narrowing down SP-500 stocks by looking at those which did not move in step with the main index. This could be based on relative strength or beta, with the rationale that action is occuring in these stocks which is not related to wider market conditions.
Any ideas / views / approaches that work for you? Are one group of stocks more or less likely to be suitable for P&V analysis than any other?
Many thanks in advance,
Richard
