Profitable Stock Pick System

Market Heading For A Fall?

Christopher — Tue, 18 Aug 2009 13:39:17 +0000

There’s a small gap that looks like it wants to be filled on the $SPY. Remember, September is the toughest trading month. Its coming.

Portfolio Size

Christopher — Tue, 07 Jul 2009 19:24:29 +0000

For demonstration purposes, we’re going to start off with a portfolio of $20 000. We wont include commission. We will however buy at the open on the next trading day. This provides you an advantage – you can modify your orders to set limits on where you will initiate a position. We buy and sell at the next business day. No intra day trades here.

Stock Position Sizing: Is It Worth It?

Christopher — Tue, 07 Jul 2009 19:02:49 +0000

Up until late last year, I invested like I gambled: fold or go all in. The result? A pretty disasterous 2008

What is stock position sizing? It comes down to finding the right amount of stock to buy that allows you to capitalize on a good stock pick, while still maintaining a lower amount of risk. There are two parts to position sizing to keep in mind:

Number of Positions

The more positions you have, the lower the risk. Consider this: if you have a 10 position portfolio, and you take a 30% haircut on one stock pick, your portfolio would only be down 3%. If you had a 20 stock portfolio, your portfolio loss would be 1.5%. This allows your stocks to take a bit more of a wild swing without getting stopped out.

Size of Each Position

Where most investors make the biggest mistake is in the size of each position. We recommend taking an even position size. If you have a $20 000 portfolio, and you want to take 10 positions, you would buy $2000 each. Whether that means you end up with 100 shares of a $20 company or 2000 shares of a $1 company, each position has the exact same exposure to risk.

If you think that a $2000 position isnt much, you’re focusing on how much profit you could make versus how much money you are risking.

At the Market Edge 360, we take between 5 and 10 positions depending on how we see the market moving. We wont be fully invested all the time, and depending on the market direction, may find outselves with only a few positions. However, the amount per position will never be more than 10-20% of the entire portfolio.

Direction Of The Stock Market

Christopher — Tue, 07 Jul 2009 02:51:37 +0000

In our methodology, we incorporate 4 signals:

Dn – We anticipate the market direction to be lower

Up – We anticipate the market direction to be higher

Bf - We anticipate the market will be changing direction as it is currently oversold

Tf - We anticipate the market will be changing direction as it is currently overbought

Its possible that these signals may only last a few days but may stretch into weeks or even months. These signals simply tell us what the stock market direction currently is.

As of June 23, 2009, the markets direction has been Up, however, we expect to see a change shortly.

Welcome To The Market Edge 360

Christopher — Tue, 07 Jul 2009 01:13:59 +0000

We’ve spent months developing a stock market timer that helps predict when to go short, and when to go long. Along the way, we’ll also post some tips on how to improve your trades, as well as some general market commentary.

Lets start making some money shall we?