Quote from dkravchenko:
Dear Jack,
Thanks a lot for your advises!
I am not familiar with PVT trading, what is this?
Also, could you please re-state these 2 points with more details? I am not native English speaker and can not understand it clearly.
1. You universe (weekly)
As redneck says a Universe is available in one click of the mouse if you set up a set of criteria. The PVT criteria are listed in the ET PVT thread. Simply stated use EPS and RS percentiles (go to stocktables.com and apply it) and minimum daily volume criteria. You instantly have a Universe. There are several platforms that do this task instantly according to PVT rules.
Current universes could be posted. I do not think ET can handle the current Excel sheets. however.
2. Qualifing stocks for hot listing. As soon as stock appears on weekly add/delete of Universe).
Qualifying stocks is done simply and no expereince with a given stock is required. The reason is is that trading stocks is a routine and it is based on timing trades. Timing trades is based on three items: The money velocity (rank); the time of the hold half cycle in days; and the time between hold cycles in days. The Initial Analysis Sheet in either "Putting the Pieces Together" or "Building Minds for Building Wealth" is what is used. The Excel version is easy to use as well. Add this information to your Unverse Excel sheet and sort it by the starting date of the next long half cycle. In this way, weekly, you can set up all your trades in advance.
As is seen after the IAS, and adding the info to the Universe Excel, you always have a chronological list of stocks for trading on any day. Use the highest ranking stocks first. Since you know how long the hold is, you can always know where to put your capital for the next cycle of capital.
Thanks a lot!
It is our custom to meet on Sunday am and the up to date Universe is available. Traders usually have their trades set for the next week before the meeting. We review the Hot lists which have the "batting order" for each stream set up. We spend our time looking at charts of stocks and past trading.
Then, daily, individually, we use the Daily Analysis Sheet to track the stocks as they perform.
A typical day is illustrated with pics taken every 7 to 15 minutes (30 of them) in "Putting the Pieces Together". There you see the stocks on the batting list complete cycles and the next stock chosen bought before it takes off on its long half cycle.
When the SEC was unable to differentiate insider traders from traders who used this approach, the SEC issued citations to me for insider trading. It was their opinion that I could not do what I actually do unless I had insider information. Occasionally snoops from corps call me to find out who I am getting my info from. We get our information from sorting web sites and from automatic sorts off various platforms.
It was difficult to eductate the SEC but it was done, finally. Today, anyone with a PC can do much better than the SEC to understand this style of trading. It has been written up in ET and day by day done for years at a time under PVT trading.
To educate yourself, there is a one page chart with three rules on it. The chart is called the "unusual volume chart". On the chart is a "normalized" set of values for trading ALL stocks that can make it onto your
Universe as determined by "quality". The chart was checked out using a lot of trials (400,000).
"unusual volume" is a term that is a ratio of the real accumultaing volume for a day divided by the 65 day average volume. The ratio is a decimal. the Unsual volume chart has columns of three types of volume: DU, FRV, and Peaking. There is a rule on the sheet for each. All quality stocks behave the same as redneck someday will find out, maybe.
Learning to trade stocks of quality using three rules is a very quick learning process. Our team that meets weekly can bring a person on board in two meetings of a few hours each. Fifth grade children can do it quite well after three one hour meetings and having a WSJ subscription. They naturally work together and they are happy to explain trading to their parents. They use "scoring" to do the timing.
In ET there are many stock traders. Most find using the three rules "unbelievable and astounding". Read redneck or trader666 to find out why.
