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Stocks setting up for 8 to 20% move

Posted on 7/31/2015




Stocks highlighted in this video

BCRX

ASPS

GPRO

CARA

KITE

DBVT

SQBG

ZIOP

ESNT

NUAN

HAIN

SRPT

IMGN

ALDR

USAT

MMI

BLUE

MNTA

ANAC

NEOT



Video explains what to look for in these setup. How to prioritise these to focus only on 5 or so stocks. Why these setups work best on momentum stocks. How you can just with 15 minutes effort do this on your own.

Momentum Masters Review

Posted on 7/29/2015


The primary idea behind the book is series of same questions on 10 topics related to trading asked to 4 momentum traders Mark Minervini , David Ryan ,Dan Zanger and Mark Ritchie II.
The topics the questions cover are Stock selection, position sizing , technical analysis, fundamentals, general market, entry criteria, risk management , trade management and psychology.
The book gives you a decent idea about the general approach used by these traders to trade momentum /growth stocks. It shows you how four traders approach same group of stocks and same basic setup ideas differently. Understanding of what kind of styles these people use and their general process is prerequisite to understanding the book , without having that background you may not pick up some of the nuances and difference in style. 
Out of the the four traders Mark Ritchie II is the least exposed in trading blogs and media. Unfortunately the book only hints at his approach and it is difficult to get full ideas about his exact trading from the questions. For the remaining three Mark Minervini, David Ryan, Dan Zanger, they have super saturated exposure on trading media so many of the things they talk about is already been covered multiple times before.
While the book has discussion specific to the question , one of the shortcoming of the book is specific trade examples to illustrate the trade. Only for couple of questions specific chart examples are provided. The other shortcoming of the format used is there are no follow up question on answers which could have clarified some of the answers.
It is a good book if you are already exposed to the traders method, it will give you some additional color to their approach and process. You will pick up some new tactics and nuances used by them.

Bullish and bearish anticipation setups July 27 2015

Posted on 7/27/2015

Bullish Anticipation Setups

 AYI SUPN POZN EPAM ENR HIVE ZGNX ANY IPCI GDOT RPTP MOMO HQY DBVT ONTY GUID AHS OXM CVC NLS AAOI GIII BLD DEPO SRPT SRNE NFLX

Bearish anticipation Setups
Symbols from TC2000 ILMN PCRX IOC BEAV ZUMZ SUN SHLD WPC TRCO EMES SAM AFL FSLR SSTK PSG DDD CLH LGCY VNR ATEN CVLT BDBD SONS BOOM TPUB MSFT RCAP GRUB TCP RICE COUP LC SMG NTAP WDC DLPH

Market Monitor Showing glaring weakness

Posted on 7/23/2015
The breadth trends in the market do not look too good currently. There has been marked deterioration in breadth while market is making new high.

As you can see below  things are deteriorating  everyday instead of improving as rally progressed.


Very small number of stocks are leading the advance and at the same time more stocks are going down than up.

Almost all rallies have breath improvement as move progresses, we see exact opposite of that. You want to see broad based rally and dramatic improvement in breadth for sustainable move.

Biotechnology stocks have been good performer along with some large cap tech stocks , but the small caps are way weak for sustainable move up.

I am cautiously optimistic and watching thngs carefully to reduce risk in case things turn south.

Swing Trading using Anticipation Setups July 21 2015

Posted on 7/21/2015


If you want to make money swing trading , then setting up a simple process that identifies stocks likely to breakout can help you find trades daily.

The process I use to find anticipation candidates is simple and it just requires at best 5 to 10 minutes of effort after market close. Anyone motivated enough to find 8 to 20% moves in market can do this once they set up everything.

Anticipation setup looks for a stock with established momentum that is having a orderly momentum pause and series of low range days or in other words having volatility contraction.  These kind of stocks breakout with force and make 8 to 20% move in 1 to 3 days after breakout.

ASPS and ANTH are examples of this from yesterday's list. Both were highlighted in this video I posted yesterday as possible breakout candidates.

ASPS and ANTH both had a breakout yesterday. Because they were on watch list the entries on them were very early as soon as they showed some hint of strength.




ASPS made 8% move. ANTH made 16% move intraday before giving up bit of gains in last hour. Both are likely to have further gains.

One of the advantage of anticipation setup is it allows you to have very tight stop and as a result better risk reward trade. It also gives you control over your trade as you are not reacting to market breakouts and chasing things.

Anticipation setups work best on stocks with established momentum . These stocks can have several momentum bursts of 8 to 20% duration during their up move.

If you are motivated trader and keen on making money trading then developing a process and expertise to trade this kind of setup will help you find hundreds of these kind of trades in a year. 

New Buys of Top performing funds



If you are looking for position trade ideas , focus on stocks with 100 million plus buys when they first appear in this list.



fund.png

This is published every month in first week of the month. This month you have only 3 fund buys of 100 million plus which tells you that funds are less aggressive. Typically you get 10 to 20 buys. All 3 stocks highlighted are not new to the list.

Stocks that have shown up on this list in last one year or so

AAPL ABC AGN AKRX ALGN ALXN AMBA AMP ARRS ATHM ATHN AVGO AWAY BIDU BIIB BWLD CDK CELG CLR CMG CMPR CNC COMM CRUS DAL DATA DPZ EA EFII ELLI EOG EPAM EXR FB FLT FRGI GILD GMCR GNRC GPRO HAIN HAR HBI HCA HD ILMN IPGP JAZZ JBLU KKD KORS KR LNKD LOW LPLA LUV LVS LYB MANH MCK MDSO MMI MNK MNST MOH MPEL MTSI MYL NCLH NUS NXPI ODFL ORLY P PANW PCYC PEB QIWI RAX RCL REGN RH RHI SAM SAVE SBNY SHPG SHW STZ SWKS SYNA TMH TSN TSO TYL UA UAL UHS ULTA ULTI URI UTHR WLK WLL WWAV WYNN YHOO ZBRA

The list is just starting point , after that you have to wait for proper setup to buy them and also exit them at right time as growth stocks can drop a lot once the growth story goes sour.

Process orientation allows ordinary person to become a profitable trader

Some people have special trading talent which is difficult to replicate because lot of time it is instinct.

But if you do not have that kind of instinctive talent , you can still make lots of money by becoming process oriented.
Process orientation is for anyone who wants to develop as a trader. By breaking down a setup in to series of steps even a person with no special talent can trade.
Process orientation makes it easy for your brain to do complex task. It helps you develop a special kind of memory called procedural memory.
Procedural memory is memory of how to do things. Once procedural memory is learned it becomes part of you and you can do the process without thinking .
Procedural memory allows you to automate your ability to do complex task without much thinking.
Driving is best example of procedural memory. It is in the beginning a complex skill requiring , hand, leg, eyes, ears and brain (see a learning driver struggle to understand this) , but once you learn it , it becomes part of you.
image
So much so that I see drivers applying makeup while driving , texting , eating .
Same way you want to become an expert driver in trading a setup. In order to reach that level, you need to follow a process and practice a lot. Once you do that you can effortlessly trade. 
Research on procedural memory has shown that practice plays an important role in developing it.
If you want to trade say Anticipation setup discussed here or  momentum burst setup or any other setup, extensive amount of developing procedural memory is what you need to focus on.
Anyone can learn driving , same way anyone can learn trading once they become process oriented. 

Procedural memory deals with skills

You develop skills only if you develop unconscious memory for doing it.
For a skilled dancer procedural memory involves unconsciously coordinating hands, legs, and body to create graceful fluid motion.For a skilled ice skating it is similar thing. Same is case for gymnast.These professionals spend years perfecting their skill under close supervision and coaching .
As against that everyday you see people with very little trading skills or those who have not spent serious times perfecting a setup want to instantly become great traders. I get lots of emails daily like that .
Procedural memories are typically acquired through repetition and practice. When you do that your brain undergoes some changes and automatic behaviour sequence memory is formed. That memory gets so deeply embedded in our brain that we are no longer aware of them.
For a swing trader it is same thing. For a given setup he or she develop procedural memory which kicks in as soon as that setup shows up.
For a pullback swing trader it is same thing. When they see a pullback setup he or she has developed procedural memory which kicks in as soon as that setup shows up.
If you want to develop as a trader start by developing a procedural memory for

Just one setup

Develop procedural memory for momentum burst
or
Develop procedural memory for Episodic Pivots
or
Develop procedural memory for pullbacks
or



That involves some serious practice, thinking and sacrifice....
Sacrifice is required to not flirt from idea to idea and setup to setup and trade to trade. You have to narrow your focus to single setup or single entry technique or single or single exit technique.
Trying to do too many things without developing sufficient skills can lead to confusion and wasted efforts,
Focus on just few things and then develop procedural memory for it before moving to other things.