Financial visualisation website FINVIZ.com is one of my favourite trading tools. I use it every day to keep a tab on markets and look at charts.
The stock screener on Finviz is also one of the best I’ve found with more than 60 filters that can be applied to 7000 US stocks.
In the rest of this article, I will take a simple stock screen from Finviz and backtest it on historical data using the backtesting platform Amibroker. This will give us an idea of what to expect if we were to pick stocks according to the screen. Read more »
The concept of trend following is based on the belief that security prices move in upwards or downward trends over time and that the surest way to profit from those moves is to attempt to ride those trends.
Despite some claims that trend following is a strategy for nonconformists, trend following is in fact hugely popular, particularly among retail investors. Read more »
In this post I take a look at one of the greatest traders of all time, Jesse Livermore. Jesse was famously profiled in the classic investing tome Reminiscences of a Stock Operator, a book that has been called the best trading book every written.
This is a long piece, clocking in at around 9,000 words and it covers all of Jesse’s most important trading lessons. The quotes are taken directly from the original book by Edwin Lefèvre. Read more »
2015 has not been an ideal year for stock traders so far. As you know, we have seen plenty of volatility in China, Europe and Emerging Markets. The S&P 500 has been trading in a choppy range for much of the year and is currently showing a year-to-date return of only 1.57%.
Our trend following system is currently ahead of the benchmark index by a healthy margin and this is based on various metrics of performance and risk. Read more »
In the classic trading book, Reminiscences of a Stock Operator, Jesse Livermore spoke a little bit about a professional gambler called Pat Hearne. Pat would treat the markets like a casino game (such as roulette, faro or blackjack) and his strategy was to make a series of calculated bets, always looking for small, sure wins. Read more »
There is a lot of bad information in the trading world and the strategy of trend following is often misinterpreted. It can be especially hard for a beginner to get to the truth and that’s why I’ve put together this trend following PDF which you can download for free. Read more »
Recently, a reader questioned the trading systems that are presented in my book and course.
I do not actually know whether they bought the book or the course or not but they emailed me to say that none of the trading systems presented work. Read more »
I am trialling a new trend following stock trading strategy. This strategy looks for stocks breaking out to new 52 week highs. The stock must also have decent sized volume, a PEG less than 1 and an RSI score less than 70. Trades are exited on a 20 week low. So far, results look promising but too early to say whether it will work longer term. I am paper trading this before taking it live.
Here are this week’s trend following stock picks. Both are in the auto parts industry suggesting that this is a good sector to be involved in as a whole. Normally I wouldn’t buy more than one stock in the same sector. Out of these two I’d go for MGA.
Magna International Inc ($MGA)
Magna International is an auto parts wholesaler based out of Canada with 128,000 employees in 29 countries. The stock has broken to a new 52 week high but the financials are in good condition. PEG is 0.99 and price to sales is 0.67. EPS has grown over 100% over the past 5 years and current ratio is 1.30. The stock also has 5% insider ownership.
Lear Corp ($LEA)
Lear was founded in Detroit, Michigan in 1917 and is a leading manufacturer of assemblies for the automotive and aircraft industries. PEG is 0.94 and forward PE is 10.30. EPS is expected to grow at over 18% over the next 5 years.