Practicing Stan Weinstein's Method

[traderprg]

I would also like to see a 1 to 3 risk to reward ratio.
I size my trades somewhat similar to you. I determine where my stop will be based on where there is resistance. I put 0.5% of my capital at risk. The difference between entry and stop divided into my risk gives me my position size.

Good discussion on Risk:Reward! Do you follow your 0.5% risk rule strictly?

 

[deaddog]

Good discussion on Risk:Reward! Do you follow your 0.5% risk rule strictly?

More or less.

I don't put stops in the market, so I have had one or two get away from me because I don't watch all day. Also gap downs have beat me up from time to time.

I do honor my stops. If a stock closes below my stop I place a stop order under that days low and will continue to move the stop up under the prior days low until I reach my entry point. At that point I leave the stop at break even.

For stocks that move in my direction I use a close under the rising trend line to signal an exit. Same procedure; when a stock closes below the trend line I place a stop in the market below the daily low then chase the stop upwards until price makes a new swing high.

I also round my position down to the nearest 50 shares so I might not have the full 0.5% at risk.

 

[traderprg]

thanks for sharing.

I favor sell-stop so that I don’t have to monitor the price and to avoid getting panic then do something stupid. Automation gives me a peace of mind.

When deciding how many stocks to hold, I am using a simple method. For my ~20k capital, I purchase maximum 5 - 6 stocks and ideally to have 5% - 10% stop loss per stock. That gives me 1% - 2% capital loss for 5 stocks. And I leave some cash reserved when the market is trendless or no good purchase candidates to limit further loss.

Another method that helps me reduce risk greatly is to spread my investment equally so no more 1000 shares of everything. Instead I invest 5k on X and another 5k on Y, for example.

In the end, a winning strategy and psychology will prevail.

 

[deaddog]

thanks for sharing.

I favor sell-stop so that I don’t have to monitor the price and to avoid getting panic then do something stupid. Automation gives me a peace of mind.

I’ve been burned too many times with spikes down that closed a position then recovered.
In the case of a gap down you end up getting filled below your stop. Depending on the reason for the gap down the price may recover. I’ve found that placing a stop under the gap down day and following it up with some kind of trailing stop has worked (for me at least) better than taking my loss the first day.

When deciding how many stocks to hold, I am using a simple method. For my ~20k capital, I purchase maximum 5 - 6 stocks and ideally to have 5% - 10% stop loss per stock. That gives me 1% - 2% capital loss for 5 stocks. And I leave some cash reserved when the market is trendless or no good purchase candidates to limit further loss.

Another method that helps me reduce risk greatly is to spread my investment equally so no more 1000 shares of everything. Instead I invest 5k on X and another 5k on Y, for example.

In the end, a winning strategy and psychology will prevail.

I keep buying until I run out of capital. The number of shares doesn't affect my decision. I may buy 50 or 1500 depending on the price of the stock and the risk I'm willing to take.

I actually have a losing strategy. I take my stop more often than I take a profit but the profits are much greater than the losses. As of June 1st I'm only winning 37% of the time. I have increased my capital just over 8%

 

[traderprg]

Had a busy week..

STEM is another stock that matched my screener rule perfectly. Here is the chart

my latest portfolio.

 

[traderprg]

Yesterday market correction has triggered HGT sellstop.

And I bought 500 shares of REDF because it has pulled back close to it's breakout level with shrinking volume. This is a test on pullback buying strategy.

Another stock came out of screener: FOLD I am waiting it pullback further before purchase.

 

[NKNY]

What screeners do you guys use to find these stocks in stage 2 breakouts.




Thanks

Nick

 

[taowave]

You can use any product like Quantshare, Amibroker or Stratasearch. All you have to do is code the 30 week MA cross and visually inspect charts.

I'm sure there are free services as well.

 

[Bamanation118]

Thanks, great posts guys. Can anyone guide me in setting up a screener like be more specific ,for example how do you code a 30 week ma cross? Do you guys use anything besides trendlines to project a prices possible movement? Thanks to all and Happy Trading

 

[badcharts]

Thanks, great posts guys. Can anyone guide me in setting up a screener like be more specific ,for example how do you code a 30 week ma cross? Do you guys use anything besides trendlines to project a prices possible movement? Thanks to all and Happy Trading

Hi Guys,

There is a nice forum to cover all Stan Weinstein Stage Analysis type questions => https://stageanalysis.net/

Regards,

Patrick