Victor's Watchlist

[Victor]

Bryan asked me to post my new scan results.  Let me begin this topic by saying... I am not recommending these stocks!  ALL trading decisions are your own, and your sole responsibility.

Ok, with that out of the way I'll start with a short description of what I'm doing to generate this list.  I have a number of scans (built at stockcharts.com) that I review at least weekly.  I continue tinkering with new scans so the process of generating the list is evolving.  Last, but not least I review the charts of the scan results, tossing out a number of them simply because I don't like the picture the chart presents.  In summary, this is not a system.

Also, most of the scans are setups, not trade triggers.  Therefore, once I've picked a chart I like it gets put on the watchlist, I don't trade it immediately.

I haven't traded a number of these due to cash restrictions.  The recent run in several sectors (if not most sectors) has generated a lot of results.  I'm currently invested in previous picks, so unless I get stopped out (or I otherwise take profits) I'll miss a number of these.

Now, on to the list... which I'll post in separate message as I've reached the message size that causes the scroll bar to go wonky.


Cheers,

Victor

[Victor]

Here's the list, all on Toronto unless indicated as on the Venture exchange (with a .V after the symbol).

BCF
CGE.V, would have bought the recent breakout.
CLM
EMP/A
FES
FNX, would have bought at 9.50 trendline breakout.
GBU
GDC
GLG, possible entry at 2.35, was expecting another pullback, but it took off.
GWG.V
IMN
LAM
MDC
MDR.V
MOL, would have bought trendline breakout at 0.95
NTB.V
NGL
OLE
OOO.V
OYL.V
PZG
PBG
PGD
PIF/UN
KCL
PRQ (caution with the gap below)
PSX
RML.V
ROK.V
SLW
TRE
TRX.V
TBE, would have bought trendline breakout at 0.975
UEX
VTR
WEE
WLC.V, would have bought trendline breakout at 1.15
WS.V, would have boughth trnedline breakout at 0.525
WTM
ZL

Double the requested 20, but keep in mind many of these won't turn into trades.  I'd like to keep all of my watches under 50.

Here are some additional entries in another list I maintain...

DML
DRX
MUN
NXY
PDN, missed the recent breakout.
PMT/UN
POW
URE, would have purchased at 1.00 on breakout.
UUU, would have purchased at 2.60 on breakout.
WND.V

Note that once in a trade I'll place stop under it and move it up periodically.  The amount I invest in any position is dependant on the distance from my entry point to the stop.

I view this as an ongoing experiment that hopefully bears some fruit. 

The market seems ready to rollover.  However, this has happened over and over since March and equities have continued their ascent.  For now I'll continue to simply follow my stops.  If the market does indeed fall from here I'll likely come out ahead with some profits.  However I will have given up substantial profits as most of my positions are well above their stops.

We'll have to wait and see... nobody can predict the future!

I'd appreciate feedback on this, don't be shy.

Cheers,

Victor

[bryanmcn]

Hi Victor
You said:
 "The amount I invest in any position is dependant on the distance from my entry point to the stop."

That sounds a lot like the position sizing technique that Van Tharp recommends. Have you heard of it?

Bryan

[Victor]

Hi Bryan, yes I've purchased a few of Van's books / courses.  I've been able to pyramid up on one stock so far, and then I closed half the position after a significant jump.  So I haven't been able to pyramid up on the winners yet.  The problem I'm having, as you can see from the number of stocks I "would have bought" is that it's not possible to buy all of these AND pyramid up.  The reason is the entries I get are close to support and hence the stops are rather tight.  This means I can put on a sizeable position (relative to the account).  Even if the stocks perform well they don't generate enough increase in margin to allow additional purchases.  What I'm trying to say is that it's not just a function of account size.  The position sizing method allows for large positions hence less number of trades.  This isn't necessarily a bad thing, but I'll have to develop a way of being more selective.

Your thoughts on this??

Cheers,

Victor

[bryanmcn]

Victor
Lets see if I have the right "Van Tharp" approach to position sizing first.

My understanding is that you take the approximate variation in the price of the stock your looking at for the time period that is appropriate. Assuming you limit your loss per position at about 1 percent of your portfolio its simply a matter of dividing your risk by the variation to get the number of shares.
For expample;

PKI/un.to - has a weekly (thats my time frame) variation of about $.50. If you have a $100,000 portfolio your risk limit is $1000 (1%)
So your position is $1000  / $.50 or 2000 shares which is just under $23,000.

You would end up taking a smaller postion in the more volitile cheaper stocks.

Is this the way you understand it?

Bryan

[bryanmcn]

Victor
Selection: Here are some things that I do;
1) Eliminate the low liquidity plays.
2) Dump anything under $5.00 (unless the chart shows a Perfect set up)
3) Look at the charts from different time frames. 1 day, 3 days, 6 months, 1 year, 2 year. Its amazing how many stocks look bad in all but one time frame.
4) I prefer higher priced stocks (mostly to save transaction fees) so I'll give preference to the most expensive.
5) FInally I'll go down the list putting stars beside each one. Up to 4 stars. Basically rating them based on their charts.
Its good to have 4 or 5 to choose from when the markets open. After the first hour of trading, I'll pick the one(s) that are moving in the right direction.
Bryan

[Victor]

Bryan, thanks for the info an culling the list.  I'd be tempted to take your method and run with it.  After all, it reduces the watchlist to 10 or so, and looking at them in multiple time periods probably reduces it further.  However, I'd have to study the results more closely as I suspect some of the lower priced stocks experience some of the biggest percentage increases.

As for Van's portfolio sizing algorithm... there really isn't one.  That is to say, there are many models he presents.  While I've developed some additions to the more interesting ones, implementing them in practice means the stocks have moved more than my current holdings have (so far).  What I'm getting at is that many of the positions sizing algorithms deal with what to do once you've booked profits or seen a substantial increase in your open profits.  What I'm doing is setting the 1% risk at the entry less stop (regardless of volatility).  Once you reach the point of raising your stops it allows you to add to your winning position, provided you've got the buying power to do so.  I think the reason I'm comfortable with this strategy is that I'm trying to find low risk entries, which are very close to support levels.  Hence the daily volatility doesn't matter much.  If you were chasing a fast moving stock then volatility would factor into your position sizing.  After all your analysis you need to determine if your stop is volatility based or whether it's based on something else (like perceived support levels), and adjust your position size accordingly.

Let me know if the above is simply rambling, I'll try to explain better if I know how you're reading this.

Cheers,

Victor

[bryanmcn]

Victor
OK- So you add to a position that is trending up as you raise your stock(?) That makes sence. I will do the same but I treat the second transaction as a completely different trade. I keep a paper log of all my trades and make notes beside them.
I only set a real electronic stop if I'll be away for days at a time and have no access to the internet because there are so many shake outs.
I WILL set a mental stop on all my positions. Initially, I didn't have the dicipline to carry them out but after enough "tuition payments" it become easier.
The volitility plays a part when I set the stop but its usually easy to see when a trend has stopped or reversed on most charts.
Are you getting stopped out a lot when you don't want to be?
Bryan

[Victor]

Bryan, like you I'm using mental stops, and paid my dues.  Stop running is a fact.  Particularly early in a session, the whips recently have been huge.  I've had a few stops get hit, but most of my positions have stayed above the stop I set at entry. I'm getting close to chucking some with a "time stop" as some have stalled out.  Short periods of rest are ok, but money that's not compounding should find a better home.

Cheers,

Victor

[bryanmcn]

Hi Viictor
Are you stopped out yet? Most of mine hit. I see GW had an up day today so I bought some of that.
Also bought some reverse EFT's in case the bear market continues. I'll get out fast if it turns up though.
Bryan

[Victor]

Hi Bryan, I had a few stops get hit yesterday.  We'll see what today brings.  I'm sure I'll be down a bit as I hold TA and they announced a share offering overnight at a price 40c or so below market.  I do have a couple holdings that are bucking the trend which is helping so far.  If the stops don't get hit they get to stay, otherwise they're out, and so it goes.  Nothing new on the screens.

Good luck,

Victor

[alhigou]

The technicals for CLM.TO are looking strong.

Here is the chart:
http://canada.stoxline.com/q_ca.php?s=clm.to