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I am interested in trading stocks on an intermediate time frame. I am
primarily looking to apply a Wycoff approach--speculate in stocks breaking out
of trading ranges--horizontal patterns.
I would appreciate comments (including the pros & cons) re: alternative
approaches for identifying the population of stocks in which on intends to
speculate.
Conceptually, I think there are two broad approaches.
One approach would be to track closely a fixed uninverse of stocks (for
example, the NASDAQ 100, Dow 30...) and wait for the proper setups to occur
within that population. The primary benefit I see from that approach is that
you would become intimately familiar with those stocks--develop a good feel
for their movements. Concerns--which stocks to include within population, how
many to include...
The second generic approach would be to screen a large universe for stocks
that meet certain criteria (making new high/low, above moving average...).
There are various approach one could use to sift through a large
population--scan for various technical/fundamental criteria, scan chart books,
use newsletters as a first pass filter.
One could also use a combination of the above--for example annually, screen
for stocks that meet certain criteria (trading at <50% of 52 week high?) and
then follow those stocks during the current year.
I would appreciate others thoughts.
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