Tech Talk
Want Big Fish?
Fish Where the Big Fish Swim
The art of Technical Analysis, for it is an art,
is to identify a trend reversal at a relatively early stage and then ride that trend
until the weight of the evidence shows or proves that the trend has reversed.
Martin Pring
Clarify, Simplify & Multiply
Copyright 2009-2014: Active Trend
Trading
…A Light for My Path.
Psalms 119:105b
Disclaimer
•
U.S. Government Required Disclaimer – Commodity Futures Trading Commission Futures
and Options trading has large potential rewards, but also large potential risk. You must be aware
of the risks and be willing to accept them in order to invest in the futures and options markets.
Don’t trade with money you can’t afford to lose. This is neither a solicitation nor an offer to
Buy/Sell futures or options. No representation is being made that any account will or is likely to
achieve profits or losses similar to those discussed in this training. The past performance of any
trading system or methodology is not necessarily indicative of future results.
•
CFTC RULE 4.41 – HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN
LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT
REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE
RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN
MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN
GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF
HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY
TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.
•
All Materials presented are for training purposes only . Traders should paper trade any new method
prior to risk of personal capital.
Copyright 2009-2014: Active Trend
Trading
•
Founder & Lead Technical Analysis at Active
Trend Trading
•
•
Dennis W. Wilborn, Sr., P.E.
http://activetrendtrading.com/
Organizer Bay Area Money Makers
• Co-Host w/David Grandey
“How to Make Money Trading Stocks—Market Stock
Talk”
[email protected]
•
Featured Guest —”IBD Radio Show”
•
Trader since 1988
•
IBD student since about 1993
•
Affiliate with Market Technician Assc.
•
Certified Candlestick Technician
Copyright 2009-2014: Active Trend
Trading
Want Big Fish?
Fish Where the Big Fish Swim! But, Where is that?
Copyright 2009-2014: Active Trend
Trading
Want Big Fish?
Where is that?
What Lake? But this isn’t the total answer!
- If you fish in the right lake but fish from the dock your results will be
based on luck!
What side of the Lake? Refining the search!
What Cove? Refining the search!
What time of year? Refining the search!
What time of Day? Refining the search!
So the fisherman does his homework and does everything
right—there is still no guarantee he will catch fish!
Copyright 2009-2014: Active Trend
Trading
Want Big Stocks?
Where do the Big Stock Swim?
What’s the Lake? IBD
Which side of Lake? IBD Special List
What Cove? IBD 50
What time of year/day? Big Picture & Market Pulse & Current Outlook
Copyright 2009-2014: Active Trend
Trading
Want Big Stocks?
In 2010 I began tracking the initial IBD 100 of 2010 to assess its strength as
a stock picking system. Did this list really point traders and investors to the
Trophy sized Stocks?
The results were pretty remarkable even if one had tracked and traded the
original list.
Results for the Top 10 stocks from that list
Copyright 2009-2014: Active Trend
Trading
Want Big Stocks?
Impressive One Year Results—But what about other years?
Thus the journey began!
Went to my beginning list from 2009! Great results!
In 2011 the IBD 100 was converted to the IBD 50 to provide a more focused
list. If one would have taken the first list from this year was there enough
movement in the price action to support a profitably Trend Following
Strategy? Great Results!
Went to the IBD Archives for 2007 & 2008: Great Results!
Five years worth of data—with each year leading to Great Results!
Added 2012 & 2013—Great Results!
I think there may be a trend here!
Copyright 2009-2014: Active Trend
Trading
Results 2007 Low to High Range
Trades would have required patience and diligence
Copyright 2009-2014: Active Trend
Trading
Results 2008 Low to High Range
Low Priced Stocks would not have bought
But Wait, There’s More!
Copyright 2009-2014: Active Trend
Trading
Results 2008 Beginning of Year to Pre-Low High
First Clue of the Cyclic Nature Of the IBD 50/100
Copyright 2009-2014: Active Trend
Trading
Results 2013 Low to High Range
DDD showed the critical importance of the Running List!
Copyright 2009-2014: Active Trend
Trading
Want Big Stocks?—Cherry Picking?
Distractor Say “You’re Cherry Picking!” I say, “Really?”
What does the study show? Using the S&P as the benchmark how many
stocks on the list beat the S&P in the tradable rally from High to Low?
Copyright 2009-2014: Active Trend
Trading
Want Big Stocks?—Cherry Picking?
2009 Lowest % of Stocks beating S&P
2013 S&P Gain for the Year 29%
Copyright 2009-2014: Active Trend
Trading
Want Big Stocks?—Prep
170 stocks to review is too many…..
50 stocks to review is to many…..
My routine to hone down the list to my Action List
1. Review IBD 50 Thumbnails Tuesday & Saturday
2. Sort the Running List Weekly based on my Entries
requirement
3. Sort the IBD 50 Daily
4. Sort my Action List Daily (This list change very seldom)
At each step the best stocks float to the surface
Copyright 2009-2014: Active Trend
Trading
Want Big Stocks?—Prep
Honing the List Down:
Twice a Week Review
Copyright 2009-2014: Active Trend
Trading
Want Big Stocks?—Prep
Twice a Week Review
Copyright 2009-2014: Active Trend
Trading
Want Big Stocks?—Prep
Weekly Sort of Running List - 170 stock to 10 in less than a second
- Similar sort on IBD 50 after swapping the Outs & Ins
- Now What?
Copyright 2009-2014: Active Trend
Trading
Want Big Stocks?—Prep
Do the stocks meet my criteria for:
- Volume Profile
- Pattern Profile
- Option Availability
I continue to tighten the requirements on the Big List until just
a few of the best remain!
I now have a list that I can trade with no concern for
- Fundamentals
- Volume
- Other Variables
I can now focus just on Technical Analysis
Copyright 2009-2014: Active Trend
Trading
Want Big Stocks?—Prep
The Action List : My Search Is Done
- Daily sort of Action List
-This List Does Not Change much during the year
I know that between this list and TNA
there are several 100% winners
Patience & Faith in a Winning System
Copyright 2009-2014: Active Trend
Trading