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To:StockShare
Publishing
Sent:
Monday, May 02, 2011 3:42 PM
Subject: The Three Filter Method
I have been tracking a model account which uses my Three Filter Method
I introduced on the Webinar on this website. The filters I use are:
1. RSI less than 20.
2. Price has declined to the 50% Float Line or the lower Float Line.
3. The price has pulled back to an important square using my Principle
of Squares Indicator.
The group of stocks I track remains constant and is provided by subscribing
to the Motley Fools Rule Breaker service.
When 2 of the three conditions are met, you buy the stock when it gives
you a bullish daily price entry. These are :
1 A Y up on the daily swing chart.
2. A down Inside buy on the daily chart.
3. A long legged doji on the daily chart.
. If none of the above occur, use a similar setup on the weekly chart
as an entry.
Once long use a stop one tick below the lowest price in the entry setup.
Sell 50% of the position when it rallies to daily resistance near the
20 day EMA or the 50 day SMA. The key is to get a quick profit and then
ride the remaining position as long as possible. Once the 50% profit
is taken, bring the stop on the balance up to break even
Since 2/10/11, this portfolio has produced closed profits of 7.92% and
is currently showing an unrealized profit of 9.12%. The majority of
the open positions now have stops at break even, so if the market takes
a dive, the portfolio will go to cash and keep the 7.9% gain it has
already booked. I am very pleased with these results thus far.
David Reif
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