Being able to make the correct stock picks is a must if you wish to be successful trading stocks. Failure to choose the right stock to trade in the first place will make selling it back for a profit an uphill, if not losing, battle. Asking the right questions about a stock before you invest your money is essential to any good stock trading strategy.
The best approach to using the Momentum Stock
Trading System is to focus on the stocks which show
up in the momentum Screener. Try to
divide your portfolio into about 4-6
equal positions. Choose stocks from all
momentum Stock Screening criteria and diversify your
buying by time and by sector. In other
words, don’t load up by buying all 4-6
stocks in the same week, and don’t buy
only tech stocks, for example.
oney Management Part II
If you confine your buys to stocks that
pull back, you will generally not
overpay for them. As you continually get
better entries on your stocks, you
tend not to get whipsawed as much by price
dips. You are also able to start
taking profits at an earlier stage. You
also lower your risk if the stock
turns out to be a sour pick and you are
forced to sell it at a loss.
MONEY MANAGEMENT
OK, now we have identified a high-flying
stock in a decent market. When do we
buy it? How much room should we give it to
go down if it proves to be a bad
selection? At what point should we sell it
to take a profit?
Scan 1
* Specualitve Momentum (RS99-15)–This
screen looks for stocks priced 15 or
less with relative strength of 99 (the
highest possible), volume of at least
100,000 in the past week and average daily
volume of at least 50,000. It’s by
far the most consistently effective screen
I have devised.
