Stage Analysis Beginners Questions

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RE: Stage Analysis Beginners Questions

Platform or method to screen nyse stocks for companies that are less than 10 yes old,thank you

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RE: Stage Analysis Beginners Questions

(03-23-2019, 06:00 PM)davep Wrote: Platform or method to screen nyse stocks for  companies that are less than 10 yes old,thank you

finviz.com can probably do it. It has an IPO date setting and can screen just the NYSE if that's what you want. Doubtful that it'll let you specify the last ten years from looking at it though. But does give some options for filtering by IPO date

isatrader

Fate does not always let you fix the tuition fee. She delivers the educational wallop and presents her own bill – Reminiscences of a Stock Operator.
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RE: Beginners Questions

(04-07-2013, 01:13 PM)isatrader Wrote:
(04-07-2013, 09:06 AM)Sapphire Wrote: Is there a software where one can automatically pull picks based on a predefined range. I see a lot of sites  where you can do this on specific crossover events. Is that possible with the Weinstein method?

There isn't any software capable of identifying the Stages accurately as it requires a number of discretionary elements, as you will find as you learn more about identifying the Stages. You can however, set up scans in various software programs to filter out a lot of the stocks that aren't suitable and then manually look though the remaining stocks to pick out the candidates that are making the right moves.

I like to use point and figure double top and double bottom breakouts on Stockcharts.com scanner, as this gives all of the breakouts and breakdowns each day, and then I scan through for anything suitable. Another site, Chartmill.com, has it's own method of defining ranges, which can also be used effectively, as you can look for stocks close to the top or bottom of their ranges using their scanner and then manually search the scan results for the Weinstein method candidates.

Another simple, but easy to find option is 52 week highs and lows. Barchart.com has these and you can again scan through these manually to find the best picks.

Because identifying the Stages can't be automated, that's one of the reasons for this site, as through collaboration of the members, I hope in time that we can highlight the majority of the Weinstein method candidates ahead of time in the Trader and Investor method watchlist threads.

I wanted to throw out something that I've been thinking about.  What about using a high relative dividend yield to try to spot stocks in late stage 4 or stage 1?  I've been enamored in the works of Geraldine Weiss, and it seems to make some sense.  If a stock's dividend yield is historically high, wouldn't that generally mean that the share price would be historically low, or in a stage 4 or 1 state?  I wouldn't buy based on that, but was wondering if using that as a screening tool to set up a watch list for stocks that may be break-out material would be valid.  I've done some informal looking at the "High Relative Yield" and "Weiss" screens on the AAII website, and it seems like the charts that I've looked at for those stocks seem to be in either a late 4, 1 or early 2 stage.  I'm curious about what y'all think about incorporating this methodology.

Thanks!

Tom

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RE: Stage Analysis Beginners Questions

Hello, All

Another NOOB question here (actually 2)

How much do you compromise on the signals?

I've been looking at tons of charts, and I've found quite a few that show a breakouts where the everything looks good, but the volume is not at the 2x level, or the relative strength is climbing but not above the zero line. Looking back at these charts, I see similar "imperfect" breakouts that lead to huge stage 2 moves. Do you tend to hold out for the "perfect" breakout, or do you tend to compromise a bit? If you do compromise, which of the criteria are more solid, and on which do you hold back a bit (i.e., will you allow volume to slip a bit, but hold inviolately to the relative strength requirement).

The second question has to do with stops, and trader versus investor stop strategy. In looking at charts, I generally will pull back to a 5-year chart. Say I have a stock that has a pretty choppy history, with really nice, strong stage 2 moves, but then dropping just as sharply, and giving back about half of the move before crossing the MA. With a position with that sort of history, do you ever say, "although I'm primarily an investor, on this positions I'm going to use a trader strategy with a trend line, to lock in the most gains based on a history of more (for lack of a better word) violent moves?" Or do you decide at a macro level that you are only going with setups appropriate for either trading or investing, and leave the others behind.

OK, one more NOOBISH question. As one who is just beginning to look at the charts on a weekly basis, I'm finding lots of charts that have broken out in the last 1-2 months. How far into a move will you generally buy (say that the move back to the MA has already happened). Do you tend to say, "Missed opportunity, I'll jump on the next one" or are you more likely to say, "Better late than never, this one seems to be moving will, I'm on it!"

I know that these are more personal decisions, just things that I'm thinking through as I'm thinking of crafting a strategy, and I'd love to hear some thoughts from the experts!

Thanks!

Tom

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RE: Stage Analysis Beginners Questions

(04-06-2019, 04:20 PM)daddybyday Wrote: How much do you compromise on the signals?

I've been looking at tons of charts, and I've found quite a few that show a breakouts where the everything looks good, but the volume is not at the 2x level, or the relative strength is climbing but not above the zero line.  Looking back at these charts, I see similar "imperfect" breakouts that lead to huge stage 2 moves.  Do you tend to hold out for the "perfect" breakout, or do you tend to compromise a bit?  If you do compromise, which of the criteria are more solid, and on which do you hold back a bit (i.e., will you allow volume to slip a bit, but hold inviolately to the relative strength requirement).

With so many stocks to trade (around 5000 in the US market alone) you'll find lots of big moves when looking back that didn't meet the methods criteria at the breakout point. As stocks move for so many different reasons, and so might not always fulfil the criteria, but still go on to have big moves. Large caps especially, as they rarely meet the volume part of the criteria. However, I'm of the opinion from my own experience that it is fine to miss most of the stocks that don't, as the point of the methods criteria is to give you trades with a higher probability of success, and a framework to minimise loses when they don't work. As in my opinion, trading without a method that has an edge, is just basically gambling. So it doesn't matter if its Stage Analysis, or any another method. It just needs to give you an edge so that you can make consistent gains and minimise loses and sleep well at night. So don't be tempted to compromise imo.


(04-06-2019, 04:20 PM)daddybyday Wrote: The second question has to do with stops, and trader versus investor stop strategy.  In looking at charts, I generally will pull back to a 5-year chart.  Say I have a stock that has a pretty choppy history, with really nice, strong stage 2 moves, but then dropping just as sharply, and giving back about half of the move before crossing the MA.  With a position with that sort of history, do you ever say, "although I'm primarily an investor, on this positions I'm going to use a trader strategy with a trend line, to lock in the most gains based on a history of more (for lack of a better word) violent moves?"  Or do you decide at a macro level that you are only going with setups appropriate for either trading or investing, and leave the others behind.

Trading both the investor and trader methods simultaneously is very difficult imo, as they involve very different mindsets. From my experience I've found that I'm less willing to hold investor positions through the pullback phases, when I'm also using the trader method on other positions at the same time. So I have two completely separate accounts. One for trading US stocks on a short term basis, and one investor account for trading the indexes and sector ETFs, and the occasional large caps stock. As this helps me to keep the two methods separate to a certain degree. But I still find it hard to hold the investor positions when I can see a short term top forming and am selling out of my short term positions.

So I would suggest initially trying to work out which type of trader that you are. Do you want to be checking the charts daily, and getting in and out of positions on a regular basis, just catching the momentum part of the move for a month or two. Or are you happy to check the charts on weekly basis, and and buy and hold a position through multiple pullbacks and sideways consolidations, that might give back 50% or more of the gains each time for long periods of months at a time, before potentially continuing higher for larger gains. Both methods can beat the market if traded correctly, but not many people can stick to the rules, and get influenced by other things, like the financial news channels, social media, or other people. Turn all of that off and just stick to a method, and you'll do much better than most.


(04-06-2019, 04:20 PM)daddybyday Wrote: OK, one more NOOBISH question.  As one who is just beginning to look at the charts on a weekly basis, I'm finding lots of charts that have broken out in the last 1-2 months.  How far into a move will you generally buy (say that the move back to the MA has already happened).  Do you tend to say, "Missed opportunity, I'll jump on the next one" or are you more likely to say, "Better late than never, this one seems to be moving will, I'm on it!"

The Stage 2A phase can take up to six months in a lot of cases, so don't be scared to get in when the stock has had a good initial Stage 2 advance of 100% or more and then has consolidated for a few months or so and formed a proper base with a Volatility Contraction Pattern (VCP) - this parts very important imo (read Mark Minervini's first book "Trade Like a Stock Market Wizard" to learn more about it), as Stage 2 tends to have multiple phases when a stock meets all the criteria and has a strong initial advance. So if it then breaks out again higher, from what might look like or be a Stage 3 consolidation, but to new highs, with a low risk entry and strong volume etc. Then it's a great time to get in. As the stock is in a strong uptrend already, and so has already worked off any previous resistance, and has formed a new higher base to launch from. In my opinion these are some of the best times to get in, and from my experience tend to have better odds of success than getting in after a Stage 4 decline, which so many new traders to method go for initially. So instead buy high, and sell higher - but always do so from a low risk setup that meets the methods criteria.

Always think about and plan for what you might lose first, before you think about what a trade might gain. Assess risk first always!!

I hope all that helps

isatrader

Fate does not always let you fix the tuition fee. She delivers the educational wallop and presents her own bill – Reminiscences of a Stock Operator.
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RE: Stage Analysis Beginners Questions

Thank you so much, Isa, that makes lots of sense.

Can I ask one more NOOBISH question.  What do y'all to to keep track of your trading history, and success/challenges.  Do you just use a Spreadsheet, or one of the trading diary packages (there are a few that I've found in doing a search).  I'm just thinking of getting that set up.

Thanks!

Tom

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RE: Stage Analysis Beginners Questions

(04-07-2019, 05:52 AM)daddybyday Wrote: Can I ask one more NOOBISH question.  What do y'all to to keep track of your trading history, and success/challenges.  Do you just use a Spreadsheet, or one of the trading diary packages (there are a few that I've found in doing a search).  I'm just thinking of getting that set up.

Just an Excel spreadsheet works perfectly for me for tracking the trades, as can easily be adjusted for the whatever you want, and I write down my entries, exits and thoughts on the trades in my trading journal thread in the members section of the site. So for example you can see every trade I've made since 2013 in my journal thread. I do it this way as it helps me to learn from my mistakes and keeps me accountable to myself, and stops me from making impulsive trades that don't meet the criteria etc.

isatrader

Fate does not always let you fix the tuition fee. She delivers the educational wallop and presents her own bill – Reminiscences of a Stock Operator.
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(This post was last modified: 04-11-2019, 12:28 AM by James.)

RE: Stage Analysis Beginners Questions

Hello, I’ve read the thread again that you linked me a while back and was wondering where he says you should only buy as an investor when it closes above the certain level, with that being said how long do I wait if the price is closed above to be a confirmation means you use the weekly chart? Do I wait a day, or wait at the beginning of a new week for the first day to finish and see if it closes above the certain level or wait a week for the new candle to start and the old one to still be above the level, or whatever you recommend. Hopefully that makes sense, thanks again.

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