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Stockscores.com Trading Clubs
The Stockscores.com Stock Trading Clubs will resume their monthly meetings in Calgary, Vancouver and Edmonton this month, I will announce dates, times and locations next weekend.
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Stockscores.com Perspectives
For the week ending September 6, 2003
In this week's issue:
As I travelled through Italy today, I realized that negotiating its roads without a good map is a good way to get lost. The result was that we nearly missed our ship's departure for France. After breaking a few traffic laws, we are on board but sitting here now, I am reminded of the importance of having a plan for trading the market as well. Without mapping your investment strategy, you may get lost in your pursuit of market success.
When you plan a trip, you have a series of turns and landmarks that you must make to find your way. If you miss one, you get lost and will have a difficult time getting back on track. Trading the market should be no different. When selecting stocks, there should be a series of criteria and steps to be met. Missing one of them does not mean you can go ahead to the next.
For example, when I am day trading stocks, the first criteria I seek out is abnormal price and volume activity. It is my belief that it is in these stocks that market efficiency has broken down, giving me the best chance for market beating returns. If a stock is not behaving abnormally, I don't look at it.(Stockscores.com has special filters that identify stocks trading with statisitically significant abnormal behavior)
The next landmark I seek are high probability chart patterns. If that criteria is not met, I don't drive on. However, I have seen many traders who follow my method trade stocks that have good patterns but lack the abnormal activity that should have started them on their journey in the first place. This leads to a lower probability of success. You have to be sure that all points on your map covered.
The rest of my trading plan includes the entry signal, risk management, multi-timeframe confirmation, patience and exit signals. A successful journey down the road to profit includes all of these components.
What is your trading plan? Do you have one? Most of us have an idea of what we need to do, but very few have taken the time to write it down. I had an idea how to get from Florence to Pisa today, but without good planning, we got lost. Your trading plan is something you must write down. Without a well planned map for success, your trading profitability may depend too much on luck. Writing down a plan turns good ideas in to reality.Back To Top
The Stockscores Simple market scan seeks stocks that have Sentiment Stockscores of 60 or better, and Signal Stockscores of 80 or better. The Sentiment Stockscore determines whether the market is optimistic, neutral or pessimistic, while the Signal Stockscore seeks out abnormal market behaviour as an indication that a stock deserves consideration. To find opportunities on the Canadian TSX market, I ran this scan and was given 33 charts to consider. Using the Gallery View function to view charts, I was able to quickly look at thumbnail charts to determine if there was a good pattern.Back To Top
1. T.ORV
Of the 33, one stock that stood out was this one, which not only has good Stockscores indicators but also a nice breakout through resistance from a good chart pattern. Volume is strong on the breakout, indicating that something has caught the market's attention. This stock is worth doing more research on.
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2. T.TIW
This stock is another TSX listed company that has a pretty good chart. The stock is breaking from an optimistic chart pattern, and has strong upward momentum. I think this stock is riskier than the other because it has already made considerable gains in the past year, but it does not appear ready to give up yet. As always, it is important to determine a loss limit point and have the discipline to stick to it.
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References
Get the Stockscore on any of over 20,000 North American stocks.
Background on the theories used by Stockscores.
Strategies that can help you find new opportunities.
Scan the market using extensive filter criteria.
Build a portfolio of stocks and view a slide show of their charts.
See which sectors are leading the market, and their components.
Disclaimer
This is not an investment advisory, and should not be used to make
investment decisions. Information in Stockscores Perspectives is often
opinionated and should be considered for information purposes only. No
stock exchange anywhere has approved or disapproved of the information
contained herein. There is no express or implied solicitation to buy or
sell securities. The writers and editors of Perspectives may have positions
in the stocks discussed above and may trade in the stocks mentioned. Don't
consider buying or selling any stock without conducting your own due diligence.
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