scan not updated in this market

Trading systems that work in an up market may not work in a down market.

This one works in an up market

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This page is for medium term investors

This page will update every day now

My understanding of medium term trading is holding a stock from a few days to a few weeks. Again I will concentrate on teaching my own way of trading. Doubtless there are numerous different ways traders can and will use to trade these kind of stocks.

For medium term trading, I believe you have to look where not many other traders are looking.

Let me put this plainly -- you can't achieve anything even remotely close to 30% annual long-term returns by investing in large-cap stocks. Sure, you can beat the market in the long run with that approach (and doing so to beat it by just a couple of percentage points annually would exceptional), but you won't get to 30% annually. I believe your best chance is by going small.

Why's that? First, small caps, because of their size, have more upside potential than large caps. But I must warn you, they also have more downside potential, therefore a strict stop loss rule is essential.

Second, because the big players (fund managers, etc) are often constrained to only looking at large and mid-cap companies, thus with small cap stocks you can take advantage of pricing inefficiencies.

Don’t get me wrong. I have success with my larger-cap stocks, mainly because of dividends and franking credits. But that is an area which I will discuss in my long term trading pages.

So what trading plan am I using for this type of trading?
First of all, I must point out that here, as with all types of trading, a sound money management plan, coupled with risk management, is a must. Don’t ever neglect that.

At the stage where our market is at the moment, to include all the small caps will give you a lot of selections, a few good winners, but also a lot of trades where you get stopped out. Our market is very volatile, therefore you have to be selective when investing. Watch your risk and money management.

Please do not take these examples as financial advice, I am not a financial advisor. read the disclaimer on the right sidebar.

You must do your own research.

My plan is as follows:

I do a daily End of Day scan of all ASX stocks with the following criteria:

EMA 20 and EMA 150 bullish cross over and volume spike exceeding 2 times 50 day volume EMA.

This is the only scan criteria I use.

I plan to buy every stock the next day if it is at least 1 tick above last night’s closing price. If the stock retraces from last night’s closing price, I look at the closing price the next day and again mark it as a buy the next day with one tick above last nights closing price.

I buy on every signal until my portfolio is filled, in other words, until I am fully invested.

I will give you an example.

On Oct 3, SRK came up on my scan, EOD 2.28. Buy next day if higher than 2.285, this did not eventuate. Closed at 2.17. Buy next day (5 Oct) if higher than 2.175. Again did not eventuate, closed at 2.15. Buy next day (8 Oct) if higher than 2.155. Opened at 2.17, buy now.

Now I am the proud owner of SRK.

As I said above, sound money management is essential, however I don’t think it is wise to open a position with less than $3000, as brokerage will eat into your profits.

Please set your stop loss according to your own risk tolerance.

From now on, I will be putting my daily scans according to the above selection criteria here.

Here is the criteria again:

EMA 20 and EMA 150 bullish cross over and volume spike exceeding 2 times 50 day volume EMA.

I plan to buy every stock the next day if it is at least 1 tick above last night’s closing price. If the stock retraces from last night’s closing price, I look at the closing price the next day and again mark it as a buy the next day with one tick above last nights closing price.

I will give you my exit criteria in a few days, however, please watch your money management.

Scan results for last few days

Meanwhile I invite you to email me with any questions you may have.

This page

will be updated soon

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Disclaimer: The website is intended solely for information purposes and is not to be deemed a prospectus or a solicitation of orders. The opinions are those of the author only. It should be noted that some of the stocks may have very low levels of liquidity and may result in significant percentage rises and falls. I am not a Registered Investment Advisor. Please conduct further research and consult your financial advisor before making an investment/trading decision. I may have direct/indirect holdings in the stocks listed/mentioned. My holdings may change without notice. The information on each stock has been derived from publicly available reports. Each of the stocks listed is to be considered as speculative, and may not be appropriate for individual investors. I am not responsible for any losses which may be incurred. Any financial product information contained in this website is general information only and has been prepared without considering your objectives, financial situation or needs. Before making any investment decision you need to consider whether the advice is appropriate for you. We are not licensed financial advisors....

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