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Registered User
Joined: 11/29/2005
Posts: 11
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I am curious to know what people are doing for "setups" in their systems. By a setup I mean a "screen" or some type of analysis to tell you that you should look at a stock's chart. (Unless you review all 7,000 chars everyday).
For example, are you using:
1) Only technical setups, eg. Easy Scans for certain conditions
2) Selecting stocks to review from top industries
3) Selecting stocks to review based on fundamentals
5) Selecting stocks to review based on market news
Personally, I have been trying to focus only on stocks with good fundamentals that are in high performing industries.
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Registered User
Joined: 11/29/2005
Posts: 11
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Number 5 should have been 4 (oops).
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Registered User
Joined: 12/18/2004
Posts: 180
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aw,
I went through a stage where I focused heavily on fundamentals--so heavily that I became paralyzed with trying to analyze to much fundamental data, and either missed all the good stuff or ended up picking the bad stuff. I still took the "1)" or "2)" approach of your post above, and then attempted to analyze the fundamentals on my own. I have come to beleive that there are too many factors about fundamentals that the average person has no way of knowing or anticipating, or, in my case, analyzing.
My opinion is that TC should be used first to find stocks possessing the bullish/bearish characterstics that would sway you to take a position in that stock, because technicals will most always precede fundamentals. Have a sensible loss-cutting strategy in place incase you are wrong, and those who influenced the stock to be picked up by your radar were wrong, or were trying to fool you.
This is pretty basic, and others could go into much more detail. Some folks on here seem to be pretty good at both the technical and fundamental approach. Hopefully you will get some other replies.
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Registered User
Joined: 11/29/2005
Posts: 11
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QUOTE (Stmjd74) My opinion is that TC should be used first to find stocks possessing the bullish/bearish characterstics that would sway you to take a position in that stock, because technicals will most always precede fundamentals.
Great point! Since fundamentals (or maybe more importantly the expecations of fundamentals) entice someone to be bullish or bearish on a stock, fundamentals should probably be viewed AFTER you have found a pool of stocks you like and are dwindling the list. At least for a trader; I think as an investor one might swap the two, yes? An investor would probably want to find good solid companies and then wait for a technical indicator to get you in. (This seems to be more the approach used by IBD).
QUOTE (Stmjd74) Have a sensible loss-cutting strategy in place incase you are wrong, and those who influenced the stock to be picked up by your radar were wrong, or were trying to fool you.
I have been very good with my stops (and am experimenting with others). I have been whipsawed pretty badly thus far (mostly as a result of getting in AFTER a move started), but I have managed to keep from losing my capital. I really started trading aggressively as the market turned sideways which probably doesn't help. I have had a harder time with good entry than loss-cutting.
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Registered User
Joined: 12/18/2004
Posts: 180
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QUOTE (awellman) An investor would probably want to find good solid companies and then wait for a technical indicator to get you in.
But if an investor only used TC, he/she could still find sound technical stocks, and then do their own research.
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Registered User
Joined: 1/28/2005
Posts: 6,049
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I would create a few watchlists by catagory:
1. Stocks ranked high by other services:
IBD, VALUELINE, VECTORVEST,STOCKSCOUTER and so on.
2. TC screened stocks:
LARGE CAP GROWTH
LARGE CAP VALUE
MID CAP GROWTH
MID CAP VALUE
SMALL CAP GROWTH
SMALL CAP VALUE
The value stocks would have a higher div.yield screen and
lower PE screen.
The growth stocks would have stronger earnings and
price growth screen.
Once you have created the watchlists use technicals to
flag stocks in watchlists: MAV CROSS---STOCH UP---
RSI > 50---NEW HIGH whatever technicals you like.
The idea is the watchlists will tell you where the buys
are comeing from, it will allow you to balance your
holdings. It may be a bad idea to have every stock you
own from small cap growth.
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Registered User
Joined: 11/29/2005
Posts: 11
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QUOTE (diceman) I would create a few watchlists by catagory:
1. Stocks ranked high by other services:
IBD, VALUELINE, VECTORVEST,STOCKSCOUTER and so on.
2. TC screened stocks:
LARGE CAP GROWTH
LARGE CAP VALUE
MID CAP GROWTH
MID CAP VALUE
SMALL CAP GROWTH
SMALL CAP VALUE
Diceman,
Thanks for the post. I have been working in this manner thus far, although I didn't know about the TC screens (I'll have to figure that out).
I agree with Stmjd74 in that its a little of either or in terms of order, but it seems that setups are more commonly done to screen stocks and technical analysis is utilized for entry and exit. Of course it depends on your investment style...
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Worden Trainer
Joined: 10/1/2004
Posts: 18,819
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Here is a video to check out, awellman
Using EasyScan to find stocks that meet your own criteria
- Craig
Here to Help!
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Registered User
Joined: 1/28/2005
Posts: 6,049
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Sorry if I wasnt clear. When I said "TC screened" I ment EasyScan. Also, I only like the technicals to trigger the day they happen. So if you wanted to use a 50MAV price cross, a PCF like:
"C>AVGC50 AND C1<AVGC50.1" would give you a one day signal. (if your not sure of the equations it means:
todays close is greater than its 50 day average and yesterdays close is less then yesterdays 50 day average.)
If you put the PCF in the watchlist tabs it makes it easy to see what technicals have triggered today and, because mine are setup for one day I know it just happened today.
When you download new data you must "update all criteria" to have accurate PCF'S.
The way I see it your getting the best of both worlds---you buy with technicals but you know that the stocks have some fund. quality to them.
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