Simple stock analysis Processes drive Probabilities which creates an Edge.

The understanding and acknowledgement that process driven analysis and trade management provides the best and most consistent outcome is a fact you accept or not. The reality is that it is a simple procedure many fail to follow.

PROCESESS
If you are statistically minded and a generally well-seasoned stock investor you will more than likely accept this premise and have moved on to bind your all your decision-based processes into a workable trade plan that that drives trading consistency and profitability.

PROBABILITIES
By using tried and tested methods it creates consistency in your trading and when based on a sound methodology (not hard to engineer-simple entry techniques are the best) the probabilities of success suddenly grow.

EDGE

The edge we have thus created by following this very simple methodology is one we can now repeat over and over.

THE PROCESS OF STOCK QUALIFICATION (THE ANALYSIS ENTRY)

Trend Reversal – a weekly lower low and lower high price sequence is reversed to one of higher highs and higher lows

Or

A new high is triggered

Either signal is confirmed by a Stockradar Trend Intensity Rating (TIR) of +4 or greater.

The Process of calculating the TIR is proprietary, but it is a weighted calculation on a scale of +10/-10 of price trend, volume, moving average and momentum readings. These readings are defined in our Trend Intensity Rating article.

These entry signals are designed to generate high probability signals that trend attributes are developing. Once identified using one of the two signals defined above, we can follow a developing trend higher with more confidence. Trends are repetitively occurring price events on the stock market.

THE PROCESS OF STOCK DISQUALIFICATION (THE MONEY MANAGEMENT EXIT)

TRAILING STOP

–  Limits Losses to 15%

– Locks in Profits

These exit functions are designed to keep any losses minimised, but when a trend develops, we ensure we lock in the profits having followed the price with a trailing stop.

BENEFIT: No emotion involved = higher odds of success.