Stock/Market Selection

toby · Jun 28, 2003

Most of the forum members are talking much about the entry/exit methods i.e. How to trade? When to entry and how to exit?

But few are discussing about the stock selection process; which stocks to trade? I think this is equally important for successful trading especially for small traders with limited capital.

My main criteria are looking at the changes of volume and volatility but I have little success on my selection criteria; always fail to spot the best stocks and markets to trade.

Any comments on this matter?
Thanks!

dougcs · Jun 29, 2003

My trading consists of using fairly simple entries/exits and finding stocks to trade. The real trick is finding the right stocks. I use some high level statistical methods to do that part.

Works very well for me.

DS

richtrader · Jun 29, 2003

I take all stocks which trade between 10 and 60 and have an average volume above 500,000. This gives me about 600-700 results. Then, I calculate the ADR over the last 15 days and divide it into the price. This gives me the percentage the stock tends to move each day. I sort this range percentage in descending order and trade off of the top 50-100 depending on how many charts I want to or have time to look at.

I want to be in stocks that move, and this screen gives me that.

easyguru · Jun 29, 2003

Quote from toby:

But few are discussing about the stock selection process; which stocks to trade? I think this is equally important for successful trading especially for small traders with limited capital.

Any comments on this matter?
Thanks!

Good point.
My stock selection is strategy specific.
1 For trend trading I only trade companies which IPOed in the last ten years. And whose last five day trading volume is more than 30000 everyday. ( this list has around 700 stocks)
2 For value and options strategy DJ30 stocks
3 For swing trading long
3 yr price growth top 25%
2 yr growth top 25%
1 yr growth top 25%
26 week growth top 25%
and avg 90 day trading volume is in top 50% (this gives about 60 to 150 stocks) depending on market condition.

inandlong · Jun 29, 2003

I sort stocks the nite before that have just crossed a major average that day. I also sort stocks that qualify for NR4/ID and NR7/ID, and just InsideDay. During the day I look for stocks that have had a nice move up or down and have formed an macd divergence.

hapaboy · Jun 29, 2003

Quote from richtrader:

I take all stocks which trade between 10 and 60 and have an average volume above 500,000. This gives me about 600-700 results. Then, I calculate the ADR over the last 15 days and divide it into the price. This gives me the percentage the stock tends to move each day. I sort this range percentage in descending order and trade off of the top 50-100 depending on how many charts I want to or have time to look at.

I want to be in stocks that move, and this screen gives me that.

I like to be where the action is, too. Up until last Friday, daytradingthemarkets.com had a daily, end-of-day list organized by SortWizard that showed both OTC and listed stocks that had a range of 2 points or more that day. Now they've revamped the site and that list doesn't appear anymore. So now I'm looking for a cheap scanner that will do the same thing (SortWizard requires a RealTick feed). If anyone knows of a scanner like that, please let me know.

richtrader, what software are you using to choose your stocks?

thanx...

Avalanche · Jun 29, 2003

Quote from inandlong:

I sort stocks the nite before that have just crossed a major average that day. I also sort stocks that qualify for NR4/ID and NR7/ID, and just InsideDay. During the day I look for stocks that have had a nice move up or down and have formed an macd divergence.

Am trading a lot more daily compressed stuff as well because it tends to trend better when they do breakout. Lots of nr4's, 7's, ID, Doji's, etc.

richtrader · Jun 29, 2003

Quote from hapaboy:

I like to be where the action is, too. Up until last Friday, daytradingthemarkets.com had a daily, end-of-day list organized by SortWizard that showed both OTC and listed stocks that had a range of 2 points or more that day. Now they've revamped the site and that list doesn't appear anymore. So now I'm looking for a cheap scanner that will do the same thing (SortWizard requires a RealTick feed). If anyone knows of a scanner like that, please let me know.

richtrader, what software are you using to choose your stocks?

thanx...

I wrote my own charting/scanning/monitoring software in C#.net/SQL Server and go against the Mytrack SDK.

At first, I subscribed to an EOD feed from NAQ with all 7000+ symbols. But then, to save $30/month, I decided to use a free scan to just bring in the symbols of interest. So, up until recently, I used the free part of stockfetcher.com with this command: "Show me stocks where the price is between 10 and 60 and average volume(10) is above 500000 and volume is above 350000". I would download the 600+ results and retrieve the data from Mytrack to do the subsequent ADR percentage calculation in my own app.

Then, stockfetcher made it so you can only download 200 symbols at a time, so I found a slightly more limited free scan at usa today which limited results to 100 at a time, but I was able to modify the URL to allow for all of the results (the numresults parameter in the URL below) so for the time being I am all set. Here is the URL for the usa today scan:

http://markets.usatoday.com/custom/...&s9p2=30000000&s7p1=0&s7p2=50&s8p1=0&s10p1=62

Let me know if you want any more info.

Uni · Jun 30, 2003

has a pretty decent screener. You can scan for the recent chart action of your choice, as well as just about any indicator value that you could think of. I'm pretty sure you need to be a member to use the advanced functions.

Uni

Bankedout · Jun 30, 2003

Quote from hapaboy:

I like to be where the action is, too. Up until last Friday, daytradingthemarkets.com had a daily, end-of-day list organized by SortWizard that showed both OTC and listed stocks that had a range of 2 points or more that day. Now they've revamped the site and that list doesn't appear anymore. So now I'm looking for a cheap scanner that will do the same thing (SortWizard requires a RealTick feed). If anyone knows of a scanner like that, please let me know.

http://moneycentral.msn.com/investo...uery=SV1QF1F2SZ04L2Z&Name=Search2&Tickers=200

Regards,

Banker