Practicing Stan Weinstein's Method

traderprg · May 28, 2014

I forgot how I got into a trading. But I remember being excited reading Stan Weinsteinâs book a few years back. I dream of employing Stanâs method to screen stocks that are stage 2 breaking out with huge volume.

Late last year, I jumped back to the screener idea as soon as wife said she is pregnant. With the goal of getting supplementary income, I started trading stocks in the US market last November with a fund of 14k.

Time is limited so I mainly review my orders and run the screener in weekend and let the sell-stop work through the week. I keep an eye during the week to update sell-stop if necessary.

My total trading experience has been around 12 months. Currently holding 4 stocks plus cash, total worth of 18k. see screenshot.

traderprg · May 29, 2014

Had sell-stop 1.72 for MPET based on the trendline. It was triggered yesterday.

traderprg · May 30, 2014

Set a sell limit around 12.40 for JGT based on the swing rule - peak around $11 in july, low $9.6 in Feb. 11-9.6+11 = 12.4 which surprisingly match the 2012 support.

traderprg · Jun 2, 2014

Done weekly review and screening (surpisingly nothing stands out for stage 2 breakout. So no new orders planned). Updated my sellstop.

And surprisingly this week screener didn't return any result.

traderprg · Jun 4, 2014

JGT has been slow going. From an opportunity cost point of view, it is not worth it. I have raised the sell-stop to 10.88 of the last Oct resistance level. I will dump it next monday If there is a stronger stock to choose from the screener result.

SYPR has been doing well - growing 40% after I purchased it nearly 2 weeks ago. It's a typical pick from Stan's rule: strong volume during the breakout and large base formation from a year and half ago ( the bigger the base, the greater the upside potential). Initially I had a urge of selling 1/4 position around support level in July of 2012. But SYPR has been going strong with volume and still in early stage 2 and I am willing to risk a little bit in this situation.

HGT.. I am still holding it with a very tight sell-stop to limit my loss. Originally bought 600 shares, sold half shares near the peak before it came down with a correction. The reason I am holding it is because it still has a strong rising 30 week MA and the pullback has been happening on average volume. We will see what happen till next week.

deaddog · Jun 4, 2014

Iâm also a fan of Stan Weinsteinâs. What I remember about his method was that he used the 30 ma to make trades.

What are you looking for to enter a trade?

I modified his method a bit and it kept me out of the 2008 downturn.

traderprg · Jun 5, 2014

deaddog said:
Iâm also a fan of Stan Weinsteinâs. What I remember about his method was that he used the 30 ma to make trades.

What are you looking for to enter a trade?

I modified his method a bit and it kept me out of the 2008 downturn.

My screener follows Stanâs method:

30 week MA is mostly flat or turning up
Large base formation - at least one year so there is no near term resistance
Huge volume spike - volume during the breakout week should be at least 2-3 times of previous 4 weeks
Limit sell-stop ~10% from the entry level in order to lower risk.

SYPR is one of this example. Or my previous orders since last December: CADX, MSO, MPET, HGT

llIHeroic · Jun 5, 2014

traderprg said:
Had sell-stop 1.72 for MPET based on the trendline. It was triggered yesterday.

Consider that it is possible to know that the sentiment of this stock changed far before it came anywhere near your stop. If I read the chart from left to right, it tells me to short on 5/13 mid-day, and cover it on 6/2.

traderprg · Jun 10, 2014

llIHeroic said:
Consider that it is possible to know that the sentiment of this stock changed far before it came anywhere near your stop. If I read the chart from left to right, it tells me to short on 5/13 mid-day, and cover it on 6/2.

Thanks for you comment.

I think your chart make sense and the strong volume appeared on June 2nd confirmed it. Will keep that in mind and validate it further.

I have yet to practice shorting using Stan's method and it will probably have to wait as my time is too short ;-)

traderprg · Jun 10, 2014

Work has been busy...

A few things changed:

Changed to use GTC from GTD to avoid sell-stop expiration.

Sold JGT as mentioned previously for lack of action.

SYPR reached high $6.5 last friday then quickly sold off. The high is within the 2012 resistance zone. From the chart, SYPR was overextended with price increased in a very short time and doubled 30W MA. A correction is bounded to happen. In retrospect, A sell-limit for part of position maybe a good strategy. I have set a sell-limit to validate this.

My screener matched the first stage 2 breakout since last week - REDF. It had huge volume spike with more than 1 year and half base formation. Resumed buying with 1000 shares.