Tag Archive | "good risk reward"
Tags: allgen, finance, good risk reward, investment allocation, money management, portfolio, portfolio management, stocks
Portfolio is way down. What should I do?
Posted on 19 November 2008 by Allgen Financial
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Tags: CANSLIM, chart, criteria, good risk reward, market, screener, screening, stock, stock charts, stock selection, technical analysis
What is CAN SLIM®?
Posted on 31 October 2007 by Jmartin
I’ve discussed various portions of an investment plan in my recent blogs. We’ve discussed “how and when to buy stocks”, “how to protect yourself” and “when to take profits”. Now, let’s talk about stock selection. Stock selection is a set of criteria you set up to know which stocks to buy. William O’neal and the IBD have researched this topic extensively to find out which stocks have performed best over a certain period of time and what were their common characteristics. Their method is called CAN SLIM®. If you are looking for growth in your portfolio then the CAN SLIM® criterea is an excellent place to start.
What is CAN SLIM®?
CAN SLIM® is IBD’s checklist for the seven common characteristics all great performing stocks have before they make their biggest gains. You can significantly reduce your risk and increase returns by using the CAN SLIM® Investment Research Tool as a fact-based performance checklist to evaluate a stock before you buy.
C = Current earnings per share should be up 25% or more and in many cases accelerating in recent quarters. Quarterly sales should also be up 25% or more or accelerating over prior quarters. Learn more…
A = Annual earnings should be up 25% or more in each of the last three years. Annual return on equity should be 17% or more. Learn more…
N = A company should have a new product or service that’s fueling earnings growth. The stock should be emerging from a proper chart pattern and about to make a new high in price. Learn more…
S = Supply and demand. Shares outstanding can be large or small, but trading volume should be big as the stock price increases. Learn more…
L = Leader or laggard? Buy the leading stock in a leading industry. A stock’s Relative Price Strength Rating should be 80 or higher. Learn more…
I = Institutional sponsorship should be increasing. Invest in stocks showing increasing ownership by mutual funds in recent quarters. IBD’s Accumulation/Distribution Rating gauges mutual fund activity in a stock. Learn more…
M = The market indexes, the Dow, S&P 500 and Nasdaq, should be in a confirmed up trend since three out of four stocks follow the market’s overall trend. Learn more…
For professional investment advice on this topic contact:
Allgen Financial Services, Inc.
888.6ALLGEN (888) 625-5436
advisors@allgenfinancial.com
www.allgenfinancial.com
Tags: buying stocks, chart, gains, good risk reward, IBD, market, position management, professional investor, self investor, sell stop, stock, taking profits, technical analysis, trading
When To Sell Stocks To Take Profits
Posted on 30 October 2007 by Jmartin
Another ingredient to a successful investment plan is knowing when to take a profit. I will admit this is one of the hardest parts of the game. If you’re a successful trader you will experience a few large gains every year that will count for the majority of your total gain for the year. If you let fear control you then you may sell too early. On the other hand if you become greedy you may hold on too long and allow your profits to slip away. Below you will see an excerpt from the IBD on how to take profits. I encourage you to use this example when you create your own investment plan.
> A simple, clear-cut strategy is to sell after your stock has gained 25%, unless the stock has gone up 20% in just one to three weeks.
> Stock charts are especially helpful in spotting signs of weakness in stocks, often providing clues much earlier than any fundamental indicators show.
> Look for climax runs, exhaustion gaps, failed breakouts, significant violations of the 50-day moving average and other characteristics of a weakening stock.
> Remember to check the overall market. If the market comes under distribution and weakens, your stocks will have a hard time making any further advances.
For professional investment advice on this topic contact:
Allgen Financial Services, Inc.
888.6ALLGEN (888) 625-5436
advisors@allgenfinancial.com
www.allgenfinancial.com
Tags: chart, checklist, good risk reward, IBD, Investor's Business Daily, market, professional investor, protect, risk management, self investor, sell stop, stock
Selling Stocks To Cut Losses
Posted on 27 October 2007 by Jmartin
Every successful investment plan has an exit strategy. Knowing how to sell is arguably more important than knowing how to buy stocks. The below from the Investor’s Business Daily gives key points to think about when trying to protect your position from large losses.
* The first sell rule is to get rid of any stock that falls 8% below your purchase price.
* It’s critical to follow this loss-cutting rule regardless of how highly you value a stock. Personal opinions get in the way of smart selling decisions.
* The larger the loss, the higher the recovery you need to get back to the break-even level. (A 50% loss on a $100 stock, for example, requires a 100% gain to get back to $100.)
* Strong stocks sometimes initially retreat close to their buy point (as determined by the stock’s chart pattern). This doesn’t necessarily mean you have to sell, unless the stock goes 8% below the purchase price.
* Avoid making sell decisions based on tax concerns or commission rates.
For professional investment advice on this topic contact:
Allgen Financial Services, Inc.
888.6ALLGEN (888) 625-5436
advisors@allgenfinancial.com
www.allgenfinancial.com
Tags: charting, good risk reward, investing, investor coach, market, mentor, money management, risk reward, sell stop, stock, stop order, strategy, swing, technical analysis, trade, trading, trading mentor
Swing Trading
Posted on 25 August 2007 by Jmartin
Swing trading is a short-term trading technique where traders are usually in a position for a total of a few days to a few weeks. Swing trading is based on a phenomenom that occurs in the stock market where stocks tend to make equally distanced moves up or down. Swing trading is based on three moves. For the long side you would start off with an up move (A), then a retracement (B) which usually retraces 1/3 to 1/2 of (A), then another up move (C) usually a similar distance as the (A) move. See below for example:
Swing trading is also useful for going short in the attempt to profit from downward moves. For the short side you would start off with a down move (A), then a retracement (B) which usually retraces 1/3 to 1/2 of (A), then another down move (C) usually a similar distance as the (A) move. See below for example:
Now that we know what a swing move looks like let’s look at how to apply a swing trade. First let’s look at the long side. You need to look for a strong upward move followed by a retracement that retraces 1/3 to 1/2 of the previous move. Then, once the retracement appears that it is reversing and going back higher place a buy order. Once you’re in the postion place a sell stop below the previous lows of the retracement to protect yourself on the down-side. Look at the following illistration:
For a short trade you need to look for a strong downward move followed by a retracement that retraces 1/3 to 1/2 of the previous move. Then, once the retracement appears that it is reversing and going back lower place a sell short order. Once you’re in the postion place a buy stop above the previous highs of the retracement to protect yourself on the up-side. Look at the following illistration:
Swing trading is simple and effective! You can also use swing moves to come up with up or down price targets for the next move in the stock (reference the previous blog titled “Dertmining Price Targets”).
For professional investment advice on this topic contact:
Allgen Financial Services, Inc.
888.6ALLGEN (888) 625-5436
advisors@allgenfinancial.com
www.allgenfinancial.com
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