GUIDE TO USING STOCKRADAR
1. TRADE EXECUTION PROCESS
Model entry and exit signals benchmarked against Fridays close
All entry and exit signals executed on Monday morning
Never on when market is open, stop signals generated Friday executed Monday
Recommend maximum risk
1.5% of portfolio
$100k portfolio, Trade Size $10k
Stop = $1.5k – 15% on any one trade
2. TRADING GUIDELINES ON STOPS
- Initially set a maximum risk of 15%
- Set stop within boundaries (10-15%)
- Use lows, closes, XMA levels (10-15%)
- Never move stop down – always up!
- Moved to breakeven ASAP
- Resistance/hesitation or strong advance – stop is tightened
- Only weekly – stops never on market
- If stopped out we re-enter on a New High that re-qualifies up trend attributes.
Note the 1’% rule below.
In some instances, a stop can be tightened further. See Accelerated Stop below
Gold Stocks and Small miners: Volatility is high in these groups and members might consider using wider stops and smaller positions to prevent whipsaws.These stocks can also be excluded from portfolio data universes.
3. ACCELERATED STOP LOSS/PROFIT
The ‘Accelerated Stop’ is tightened further than the predetermined 10-15% level to protect a greater portion of profits under certain conditions. Some stocks have the requirement for lifting stops further than the ‘defined predetermined limit’ due to a low volatility or a stagnating trend especially in a situation where a stock is approaching overhead resistance. By stagnating trend it means when a stocks price is well above its stop but the exponential moving average is also well above the stop. It entails using the exponential moving average as a benchmark or previous lows to raise stops further from the predetermined stop level towards, or in some cases even above, the Exponential Moving Average (XMA).
4. 1% RULE
Price violations of 1% are required to confirm reversal or stop levels.
5. MY ‘YOU TUBE’ CHANNEL
Don’t forget you can view my You Tube videos at Richard Lie – Stockradar to help get you started or do some reinforcement of our processes. I am now also providing regular market reports on overseas indices, commodities and Stocks on the Move.
Useful information with challenging and provocative ideas and articles to inspire you thoughts.
7. DIVIDENDS, RIGHTS ISSUES, CAPITAL RAISING, BONUS ISSUES TAKEOVERS ETC
This topic is raised quite often when they occur, so I’d like to outline how I handle them. For the most part these aspects of share trading are outside my area of expertise as a price analyst. I treat them with respect but don’t let them alter my price approach. The rules I keep simple. It is my approach and trade plan I adhere to not ‘other’ effects.
Dividends: are treated as a bonus and the stop level is not altered by the dividend amount. A good and healthy stock will invariably carry its dividend well
Rights Issues: Adjust the price for the rights issue and the stop by the same amount
Capital Raising: Unless price is affected no change in stop
Bonus issues: Adjust the price for the bonus issue and the stop by the same amount.
Takeovers: If I am not in the stock I will stay away until the takeover is resolved be it predator or target. If I am in the stock, I will tighten the stop to the maximum 10%
8. STOCK UNDER OFFER
If a stock goes ‘under offer’ and it is not a stock pick I am not able to enter this stock. Stockradar is disqualified from trading the stock as takeovers are not our area of expertise. Capturing trends in response to price behaviour is our objective. If it is a stock pick I will tighten the stop and in some instances if the bid looks final I will exit at market.
9. STOCKRADAR STOCK INCLUSIONS & DELETIONS ARE REVIEWED EVERY SIX MONTHS
As a general rule I follow the below standards. The Market capitalisation figure can vary depending on the market so I try to keep coverage to around the top 160 stocks, which are taken from the ASX/200.
- Market capitalisation > 1 $Billion (approx)
- Weekly volume averages > $5 million shares traded
- Minimum 6 months price history
- Market capitalisation > $550 million (approx)
- Weekly volume averages < $5 million shares traded
10. RECENTLY ADDED STOCKS
Recently added stocks that are already ‘in an uptrend’ will have their latest high set as the trigger level.
11. MARKET CAPITALISATION GROUPS
Large Caps = 1-50 stocks
Midcaps = 51-100 stocks
Small Caps = 101-300 stocks
12. NEWSLETTER BACK COPIES
A tip for accessing back copies of the newsletter. Each one has a number identifier in the address bar of your browser i.e. Issue # 447 identifier is 1293. https://www.stockradar.com.au/stockradar/index.php?action=static&pid=newsletter&id=1293&month=0&year=
If you change that number for example to 1287 it will give you the 1st September newsletter. From here you can access various back copies.
13. EXCHANGE TRADED FUNDS COVERAGE.
Stockradar is not licensed to advise on ETF’s and thus our coverage (Stock Pick Table – Trading Centre) is aimed at qualifying existing ETF’s into trending and non trending categories effectively the same as I do with the stocks. Thus there are no entry/exit prices for ETF’s.
14. STOCKRADAR TRADING TABLES IN THE RADAR NEWSLETTER.
There are many ideas and strategies that we can employ, and I have discussed this with many members. The dangerous part is mixing them but a careful approach to managing separate portfolio strategies that might be more applicable to various life stages. We touched on this thought process in the ‘bucket’ system article. (Radars Rant Radar Newsletter February 2023)
Stockradar offers a weekly based trend and momentum approach complimented by its unique Trend Intensity Rating system as an example to help guide you to the appropriate process, techniques, and risk parameters all portfolio strategies require to be consistently successful.
Below we throw up a few different trading ideas for you that offer a relatively safe, simple, and cautious approach to trading. Adapt them if you want but remember the key steps. Process, system, risk management and self-control. It doesn’t change.
Having received some good feedback, I am still feeling my way a bit here by trying to offer you some useful trading and investing ideas to compliment what we already provide. Usually, the simplest is best.
I have broken up the tables into four different focuses requiring four different strategies all of which have been highlighted and discussed in recent Stockradar commentary. One to cover the long term opportunities of downtrodden top stocks and one to cover the new listings demergers. I have also added a New High table which is a key Stockradar setup it just lays out those ‘potentials’ for you in a simple table and we also have below that the new ‘stock picks hitting new highs/lows’ tables.
What we looking for ?
1. Opportunities Table – Leading stocks that have had 30-50% or more, corrections. For the long term superfund
2. New Highs/Lows Table – self explanatory.
3. New All-Time Highs Table – self explanatory.
4. New Listings or Demergers Table – that develop support levels below initially indecisive trading (common) patterns. Uncertainty surrounds new stocks as the market feels for value and trend. Often this causes quick and jumpy price moves. Eventually the market makes an assessment and this often can be a breakout to new highs or a stubbornly supportive low offering low risk entry.
5. Trading Range/Key Lows Table – downtrends eventually find support, often at previous lows. Identify a low risk turning point
It is possible to make money – and a great deal of money-in the stock market. But it can’t be done overnight or by haphazard buying and selling. The big profits go to the intelligent, careful and patient investor, not to the reckless and overeager speculator.’ – J Paul Getty