FAQs

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.
To obtain returns from our performance page, we use about 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 and spreads 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 market 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.   Occasionally, we will daytrade and sell in the same day 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 personally “try” to 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.

Final Thoughts:

Can superior return be achieved through active trading?
The answer is a definite yes.  Buy and hold requires a different type of personality and commitment thru fundamental analysis. For those with a trading mindset, this short term mean reversion strategy delivers a strong performance throughout the last 15 years.

The use of high percentage trades with small gains daily, frees up funds so we
can repeat the strategy again day after day,  racking up profits. This strategy is based on the tendency of stocks to reverse to their mean. The trick is to identify which stocks to trade, and we provide that service.

Trading this strategy also has its pitfalls.  You will occasionally encounter a stock that releases negative news after the trading day, resulting in a large gap down the next morning.  This is why we diversify and only trade 20% of our account per stock.  More conservative traders may even want to use 15% of their account per trade.  More aggressive traders can use margin and use up to 40% per trade.  In any case, we do not want to hold on to any stocks long term and will most likely sell on the next trading day.

In order to successfully trade this strategy, one needs to be extremely disciplined.  You need to have the confidence to trade all of our picks.  You can gain confidence by studying our past histories.
One needs to pick the right stocks, meaning picking stocks that would most likely having greater than a 50% chance of moving in the right direction in the near future.  We are here to help you achieve that.