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How to beat the market for $1.25 per week revisited- Part1

12
Around 5 months back I made the post about IBD 200. It is time to revisit some of it and look at it in details. Over the course of last 5 months, many people have tried it and some have perfected some modifications to it.I have exchanged 100's of email with some people who have perfected it and studied their success. Obviously I am not going to give away their secrets. Without giving away the exact details of what those modifications are and their exact scans, I will talk about general concepts with their permission in a series of posts.

The idea behind the post is to again get back to the theme of how methods are important and if you apply methodical thinking you can take a core idea and improve on it. Plus to show simple things work, if you put efforts to make them work, rather than flirting from one idea to another.

To start with lets look at IBD 200 from a period of 120 to 90 days ago when the original post was made.

Here are the top 20 by % change.




Here are the bottom 20 by % change.



And here are the top 3 performers with 4% breakout marked in yellow. Red pentagon marker indicates date of entry in IBD 200.





And the bottom 2. (The GEF-B is not really indicative of drop as it has to do with dividends.)



Remember the IBD list in above is only sample for around a 4 weeks. In the meanwhile there have been many more lists and many stocks out of them have gone on to make 50% plus moves after entering the list.
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12 comments:

Siya said...

Hi, Pradeep,
I guess you see a possibility of playing IDB200 candidates also for down market. Could you please comment on this?

Thanks,
Siya

Pradeep Bonde said...

Are you talking about shorting. I still remain of the opinion, it is much easier to make money on long side than on short side. Not worth spending time and energy on it.

TorontoTrader said...

Pradeep,

Have you backtested this strategy in bull and bear markets ?

Amit

Unknown said...

this portfolio based in IBD200 is not doing very well so far. Maybe the stop-loss woould have improved the overall performance, but not sure

http://stockpickr.com/port/Potential-IBD-200-Breakouts/

Pradeep Bonde said...

Amit
I started trading it in bear market. The most severe one.

Semson
I don't think that portfolio follows any rules I mentioned.

TorontoTrader said...

Pradeep,

What kind of returns did you average on this portfolio if one may ask ?

Did you get stopped out frequently ? How tight stops did you have during bear markets?

Did you experience significantly better results in a bull run with this strategy ?

Pradeep Bonde said...

I do not disclose returns.

My stops have been same for many years (2 days low before entry day, initial time stop of 5 days after 20% trail).No change in stops during bear markets.

Obviously.

TorontoTrader said...

ok,

How often did you get stopped ? Say 1 in 4 times/more/less ? any numbers ?

Pradeep Bonde said...

Approximately 30% of the time. But because of time stop my loss on most stopped out cases is much lower than if stop was taken out at 2 days low.

Jon said...

For those who compare the lists to look for new addtions, checkout conditional formatting in excel:

http://j-walk.com/ss/excel/usertips/tip073.htm

Dan said...

For clarification:
1. Sort by Float first.
2. Then sort that list by 65 day growth lowest to highest?

or is it the other way around?

thanks,
Dan

Pradeep Bonde said...

After sorting by 65 days take those with less than 10% growth.
On that to further reduce the choice sort by float.