Over the last year, I have been utilizing and tweaking an approach roughly based around George Kleinman's strategy discussed in his book Trading Commodities and Financial Futures, and would like your opinions on the system as a whole. I've only been using this system for about 8 months now, in an admittedly great year for growth stocks overall, so I may be just seeing the upsides right now. This is why I would like your input.
Founding principles: stock must be listed in the IBD50, and must be trading above 50SMA. This weeds out most of the riskier plays, and limits myself to stocks with great growth potential.
Buy signal set-up day: price crosses and closes above 23EMA. Volume should be above average in this move.
Buy signal confirmation: stock in one of the next trading sessions (preferably the very next session) trades above the high of the buy-signal session. I have been using $0.10 above previous high as my marker, but the key is that the previous move should be continued.
Sell signal set-up day: Stock crosses/closes under the 23EMA
Sell confirmation: stock in one of the next trading sessions (preferably the very next session) trades below the low of the sell-signal session. Again, I have been using a trivial amount of $0.10 as my marker.
That's it! It's a very simple approach, but one that has worked out well for me so far. Take a look at a few charts, utilizing this strategy, and let me know what you think.
Submitted December 14, 2017 at 07:33AM by bom_chika_wah_wah http://ift.tt/2ysPyq9