Trade SMART

SMART_Trader · #1 24th October 2007, 11:16 PM

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.

SMART_Trader · #2 24th October 2007, 11:46 PM

Breakouts dt 24/10/2007

rkkarnani · #3 25th October 2007, 07:12 AM

Quote:

Originally Posted by SMART_Trader

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.

Very Interesting indeed!!! Any back testing done???

balachandra · #4 25th October 2007, 08:43 AM

Dear traderji
What are the steps (methods) one should use to enter the market can anybody explain briefly, for example: 1) be ready with a chart software 2) Have a watchlist 3) Order minimum orders.etc.
Thanks in adv.
a_balu1956@*************

SMART_Trader · #5 25th October 2007, 08:24 PM

Quote:

Originally Posted by rkkarnani

Very Interesting indeed!!! Any back testing done???

No Sir. I am trading it profitably for the last ten months.
To be frank, I don't know how to back test it as the final selection is subjective.

SMART_Trader · #6 25th October 2007, 08:28 PM

Breakouts 25/10/2007

sreperu · #7 25th October 2007, 08:51 PM

Hi Smart trader,
just for the clarification for the above post, whatever the scrips mentioned in the excel sheet are broke out today with their 52 week's high price ?

SMART_Trader · #8 25th October 2007, 09:04 PM

Quote:

Originally Posted by sreperu

Hi Smart trader,
just for the clarification for the above post, whatever the scrips mentioned in the excel sheet are broke out today with their 52 week's high price ?

% from YH is the % fall from year high
for year high this value will be zero

SMART_Trader · #9 26th October 2007, 01:08 AM

Quote from "What works on wall street"-James P.O" Shaughnessy

It’s time to rank all the strategies’ returns on both an absolute and a risk adjusted basis. To present an apples to apples comparison, I rank the strategies using the monthly return data between December 31, 1963 and December 31, 2003. This allows me to include all the strategies featured in various sections of the book. These 40 years of data also cover every type of market environment, save the Great Depression. Booms, busts, manias, speculative fervor, a market crash, the biggest bull market in 70 years, and two wicked bear markets are all woven into the market’s tapestry of the last 40 years.

Forty years of monthly data prove that the market follows a purposeful stride, not a random walk. The stock market consistently rewards some strategies and consistently punishes others. The strategies found near the top or the bottom of our list possess similar attributes that are easily identified.

Each of the 10 best-performing strategies, for example, includes relative strength criteria. Yet it is always tied to another factor, usually one requiring the stocks to be modestly priced in terms of how much you are paying for every dollar of sales. All but one of the top strategies use relative price appreciation as a final screen, with the majority marrying it to low price-to-sales. The best performing strategy buys those 25 stocks having market capitalizations between $25 million and $250 million, price-to sales ratios below one, and excellent relative strength. It turned $10,000 invested on December 31, 1963 into over $60 million at the end of 2003,

SMART_Trader · #10 26th October 2007, 01:33 AM

Looking Back
25/09/2007 Breakouts