FAQ
Frequently Asked Questions
How many signals are generated per day?
A maximum of 5 signals are given per day. Sometimes, we can go for many
days without any signals generated. That is OK, since our system is based on
specific criteria, and we will patiently wait for the high percentage setup before
putting on a trade.
When are alerts sent out?
Alerts are sent out randomly throughout the trading day.
Should I take all the signals given?
Yes, you should take all the signals that we publish on our website.
To obtain returns from our performance page, we use 20% of our account
equity per trade and we trade every signals. We do not try to cherry pick the
signals, nor do we risk all of our money on a single position. Risk
management is key to successful trading. Only risking 1/5 of our account per
trade and selling all trades the next day, win or lose, will help us survive the
occasional stock that just fall without rebounding.
What size account do I need to start?
While you can start with as low as a 10k account, realize that commissions will
deteriorate profits more from a smaller account than from a larger account.
Also, it is important that you do not use your whole account on one trade.
Risk management plays a major role in trading. We suggest you use no
more than 20% of your total equity per trade.
Can you describe your system?
Which indicators do you use?
Our system is based on price movement and volatility. We only use simple
moving average as a guide. Each night we scan over thousands of stocks
based on our custom criteria, then during the trading day, these stocks are
monitored real time until a specific criteria is reached.
We then place a limit order to buy the stock and then the stock is usually
sold at market during the next trading day. The opening of the next trading
day is used as exit for backtesting purpose.
How long do you hold the stocks?
Most stocks are sold within 2 days. Sometimes a position will
be held for several weeks, but this is rare. Occasionally, we will sell intraday to capture a large move.
Do you use a stop loss?
No stop loss is used. We essentially use a time triggered stop loss as we
hold positions about 2 trading days. You could use a 10% money stop loss
if you prefer. I personnally since 2009 use a 25% stop loss for any single trade.
Do you short stocks?
This strategy does not seem to work well shorting stocks. The market does
not behave the same way when we sell tops versus buying dips. We are still
testing strategies for the short side and will offer it when that strategy proves
reliable.
Is the system mechanically traded?
No, this is a discretionary system. The entries are mechanically generated, but the trades are exited discretionarily.