SMART(Significant Move Analysis Related Trades) is an absolute strength based system. Stocks that have moved significantly over the past one year only is considered for trade. Stocks appreciated more than 100% during the past one year makes the trading universe.
The trick is to enter these stocks on a 4% plus breakout after a consolidation. if the entry is successful, we can catch the start of a new uptrend.So we are looking for yearly growth of 100% plus , 10 to 20 day weakness or consolidation, and a 4% plus high volume breakout.
Position sizing: use 10 % of the capital on a single trade and never lose more than 10% inclusive of brokerage on any trade. Never Lose more than 1% of your capital on any trade
Stops: Initial stop is pre breakout days low .Time stop of 5 days.( If the price is not going up above the entry price within 5 days , just get out).if Price appreciates more than 10% trail with 2 days low stop.
If you find too many stocks in breakout list use these to short list.
A) Prefer a smooth chart.
B) Closeness to year high is good
C) Prefer the one with high volume
D) Absence of recent 4% downward breakout is good
E) Preference for first breakout after consolidation
F) Small capital base
G) Institutional holding
H) Sector with high relative strength
I) Clear catalysts like
" Result announcement
" Bonus/Split announcement
* Sales Acceleration
* New Orders
* New Product
* Regulatory Policy Change etc.
Trading is all about probabilities, never certainties.If you are familiar with some patterns or other indicators which can turn the odds in your favor , use it. I will be posting the breakout list regularly.short list and trade at your own risk.
The trick is to enter these stocks on a 4% plus breakout after a consolidation. if the entry is successful, we can catch the start of a new uptrend.So we are looking for yearly growth of 100% plus , 10 to 20 day weakness or consolidation, and a 4% plus high volume breakout.
Position sizing: use 10 % of the capital on a single trade and never lose more than 10% inclusive of brokerage on any trade. Never Lose more than 1% of your capital on any trade
Stops: Initial stop is pre breakout days low .Time stop of 5 days.( If the price is not going up above the entry price within 5 days , just get out).if Price appreciates more than 10% trail with 2 days low stop.
If you find too many stocks in breakout list use these to short list.
A) Prefer a smooth chart.
B) Closeness to year high is good
C) Prefer the one with high volume
D) Absence of recent 4% downward breakout is good
E) Preference for first breakout after consolidation
F) Small capital base
G) Institutional holding
H) Sector with high relative strength
I) Clear catalysts like
" Result announcement
" Bonus/Split announcement
* Sales Acceleration
* New Orders
* New Product
* Regulatory Policy Change etc.
Trading is all about probabilities, never certainties.If you are familiar with some patterns or other indicators which can turn the odds in your favor , use it. I will be posting the breakout list regularly.short list and trade at your own risk.
