Finding the Bugatti Veyron of the stock market.
How does one find the Bugatti Veyron of the stock market.
For that you have to find stocks that have been blessed by the market goddess. Most of the stocks which make really big moves in the market share some common characters. Many of these stocks rally for a long period of time, they offer several opportunities to enter with very low risk entry points several time during their journey upwards. Many times , you can also find stocks like this even in the bear markets, however trading them during bear market requires some tactical adjustments due to greater volatility.
In the past I have discussed various scans and data mining techniques to find such stocks. One of the ways to do this is to reduce your trading universe to 30 or 50 stocks with such momentum characteristics and select trades from them. That way you are entering stocks with the highest probability of going up or down in a given time frame,you can anticipate low risk entry points,you can shut off market noise.
There are various publicly available trading systems like these in books, websites or blogs and there is abundant research available to show momentum strategies work provided you chose your holding period very carefully and identify momentum for a optimum period. Most of the handwork involved in making them work is moving from concept to actual execution. A little bit of tactical tweaks can help you in improving your performance with such systems.
There is absolutely no secret to these methods but like many other trading approaches 99% of people do not use them. Probably they are fearful that it might lead to profitable trading.
For that you have to find stocks that have been blessed by the market goddess. Most of the stocks which make really big moves in the market share some common characters. Many of these stocks rally for a long period of time, they offer several opportunities to enter with very low risk entry points several time during their journey upwards. Many times , you can also find stocks like this even in the bear markets, however trading them during bear market requires some tactical adjustments due to greater volatility.
In the past I have discussed various scans and data mining techniques to find such stocks. One of the ways to do this is to reduce your trading universe to 30 or 50 stocks with such momentum characteristics and select trades from them. That way you are entering stocks with the highest probability of going up or down in a given time frame,you can anticipate low risk entry points,you can shut off market noise.
There are various publicly available trading systems like these in books, websites or blogs and there is abundant research available to show momentum strategies work provided you chose your holding period very carefully and identify momentum for a optimum period. Most of the handwork involved in making them work is moving from concept to actual execution. A little bit of tactical tweaks can help you in improving your performance with such systems.
There is absolutely no secret to these methods but like many other trading approaches 99% of people do not use them. Probably they are fearful that it might lead to profitable trading.
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