Weinstein Scanning

[Hilarius]

Good Morning

I'm new here

Has anyone developed a scanning method for locating early Weinstein Stage 2 stocks?

I've tried numerous methods but none have proved very satisfactory

So I've resorted to manual scanning of charts plus watch lists

Would appreciate any feedback

Hilarius

 

[tech/a]

Can be setup in metastock.
Other than buying stock above its 150 day SMA what are the other rules?

 

[MichaelD]

Can be setup in metastock.

I'm not convinced it can be. A Weinstein Stage 2 breakout setup looks for a stock which is languishing in Stage 1 (before a run up or after a run down), doing nothing very much for a while, and then which breaks out.

In fact, pretty much identical to the setup which you use for short term trading entry (and which I'm coming to notice seems to work reasonably well).

However, it also needs to be RSC positive (stock vs sector index and sector index vs XAO). You can't code that in a Metastock search natively as stock sector is not an available variable.

 

[tech/a]

Yes I see.

So important are these and NO I dont have a search for them---I WILL pay a genius to make one up.I'll get back to you when I have been able to discuss with the few geniuses I know.

 

[nizar]

tech/a
a few questions please:

dont u think u wouldve got stopped out by those 2 red candles immediately after the arrow?
oh yeh, and then u would have re-entered (?) when the trend started up a few days later again and made a killing
is that how it wouldve played out?
where would your exit have been after that initial entry?
would u have exited in november after it went down a bit?

 

[tech/a]

Nizar I dont remember how I traded this but I didnt get the whole move
only some of those trades shown.Chart is posted as an example of how it could have been played. as a trade matures I tend to widen the trailing stops but havent had one yet to demonstrate live.

 

[Dutchy3]

Mk1 eyeball and drop anything that might even look promising into a watchlist ... be prepared to wait up to 3 years .... this is all I do and have been doing so for years now. Everytime I try to get cute and fiddle with something else I loose money

 

[happyjack]

Nizar I dont remember how I traded this but I didnt get the whole move
only some of those trades shown.Chart is posted as an example of how it could have been played. as a trade matures I tend to widen the trailing stops but havent had one yet to demonstrate live.

Bullcharts has the Weinstein Triple screen system in its programs. It also can scan for five different Weinstein setups. I have only read the book once but my understanding is that the final trigger for the buy/sell is when it crosses the 150 day MA so on your chart Tech/a it would have bought at the bottom and not sold until about a week after the top, so it would have caught 80% of it, Weinstein never claims it will get any more than that.

Bullcharts have a free 30 day trial. I own a copy and use it but I have no interest in the company.

I am not particularly impressed by the ribbon for the 4 stages and prefer to use my own judgement.

but when the SP has cleared local resistance and is above the 150 Day (30 WK) MA then it is a buy (in a nutshell)and when the MA goes above the share price it is a sell.

The buy that is marked on the left side of the screen is technically not a buy because the RSC is still negative however if the RSC is diminishing I feel it would be worth a punt if there are no better trades available, in this case it would have bagged 87cents for an outlay of approximately .25 cents or if you had waited for the real signal it would have cost .43 cents still a 100% trade

The second trade is of course the one you are looking for, but these are few and far between at the moment but the advantage of the system is that you can reverse all the signals and go short.

It is a great book whether you have the program or not it also explains that stops are essential and where to put them.

 

[goldorak]

Hello, new Belgian member here.

This is al old thread but i will use it to post some of my Weinstein watchlists/tradingsetups.

PACR seems like a nice one on the weekly chart.

I've made some remarks on the chart

Here our some additional remarks.
1. the chart shows a solid fase 1 base since march 2009,
2. if this really becomes a breakout (tomorrow/next week), we have to see more heavy volume and momentum.
3. first resistance at +/- 10, second resistance at about 25.
4. I don't have any postion in this stock right now, for now it is only on my watchlist.

Important! The last weekcandle isn't finished yet, so we have to wait until tomorrow to see if there is an actual breakout.

PS : i already apologize for writing errors made in this post as English isn't my native language

 

[tech/a]

Great job on both counts.
Charting and Language.

 

[goldorak]

PACR gained 19% this week and the closing price of the current candle is the highest since March 2009. May 2009 there was an intraweek higher price but by the end of that week the price retraced back in the trading range.

My setup for monday 01/03/2010 :

buy stop @ 4.95 with limit @ 5.43 (so if there is an opening gap above 5.43 and price doesn't retrace intraweek i will not get filled).

My entry price is based upon the high of the last candle plus 5 cents
My upper limit price is based upon the last candle plus 1 ATR distance (4.90 + 0.53 = 5.43).

My stoploss price is based upon a logical technical level but should always be at least 3ATR. In this case the stoploss is set at 2.50 (almost 5ATR).

Risk per share :
Worst case scenario : 2.93 (if i get filled at my limitprice - 5.43)
Best case scenario : 2.45 (if i get filled at my initial buy stopprice -4.95)

Risk management :
For each entry where my initial protective stop gets hit (in this setup 2.50) the total loss may not exceed more than 2% of the trading account.

 

[tech/a]

PACR gained 19% this week and the closing price of the current candle is the highest since March 2009. May 2009 there was an intraweek higher price but by the end of that week the price retraced back in the trading range.

My setup for monday 01/03/2010 :

buy stop @ 4.95 with limit @ 5.43 (so if there is an opening gap above 5.43 and price doesn't retrace intraweek i will not get filled).

My entry price is based upon the high of the last candle plus 5 cents
My upper limit price is based upon the last candle plus 1 ATR distance (4.90 + 0.53 = 5.43).

My stoploss price is based upon a logical technical level but should always be at least 3ATR. In this case the stoploss is set at 2.50 (almost 5ATR).

Risk per share :
Worst case scenario : 2.93 (if i get filled at my limitprice - 5.43)
Best case scenario : 2.45 (if i get filled at my initial buy stopprice -4.95)

Risk management :
For each entry where my initial protective stop gets hit (in this setup 2.50) the total loss may not exceed more than 2% of the trading account.

All good until I get to your M/M.

Your risk is over 50% of the stocks share price which means to reach 1R you'll need a profit of 25%. Which will represent a growth of 2% of your capital.
Sure Weinstein principals lend themselves to a long term method and if the stock reaches $100 then the entry will seem wise.
But I notice your stop is well below the M/A which would negate the setup well before the trade retraces back to the stop level. So the situation may well occur where your stops are so wide that although the original setup to the trade maybe well and truly negated you find yourself still in the trade.

How will you handle that?

Your 3 ATR rule is also interesting do you have proven testing documentation to support your statement.

I expect that you are likely to find yourself in a trade which struggles to return profit.

 

[goldorak]

tech/a,

I get your point.

The decesion to place an initial stoploss at that point has one main reason :
Like Weinstein specifies in his book, there is a difference between a trader and an invester (different approach to manage a position). This setup is clearly made from 'the investing' point of vue. In that case the price may penetrate the 30EMA, without the setup beeing violated. If the stop doesn't get hit and price goes back up i will raise the stop to a price level just below this new swing low.

Why the investment approach?
> PACR is a top performer in the sector and a leader in Quarterly Revenue Growth.

> You are certainly right that for a' trader' approach the initial stop is best placed just below the 30EMA (let's say 3.50 - and because 50 is a round number - just a few cents below it).

> the fact that the stock already rallied about 60% from the bottom of the current trading range is not a negative thing. In fact, Weinstein says, it is one of the three signs that our needed to find exceptionnel candidates. He calls it 'a triple confirmation pattern'.

> I don't think that the price has to rally to 100 $ before i can call this kind of setup a wise decision. Even if it just runs to 20 it means a profit of approximately 8% to the trading account (R4).

> I like my stops to be wider then 3ATR. I think that a ATR-based stoploss is the best way to avoid intraday (in this case intraweek) 'momentum noise'. My stoploss approach is based upon that other great book by K. THARP 'Trade Your Way To Financial Freedom'. He did a studie with a 'chandelier exit' to manage his positions. That chandelier exit was calculated on a 3ATR base (10 days exponential average).

 

[goldorak]

Another nice one on the daily chart! ING Group on Euronext

The chart says it all...

> first resistance (gap closing) = 8.5 Eur zone
> second resistance = 10 Eur zone
> third resistance = 12.5 Eur zone

Setup :
Buystop @ 7.05 Eur and limit @ 7.15 Eur
Stoploss @ 5.95 = 3ATR or - a little bit more agressive - but still below the latest swinglow point @ 6.30 Eur which is 2 ATR

 

[goldorak]

very nice Weinstein candidate for next week :
MF Global Ltd.

Volume increase = + 500%!

Setup for tomorrow 29/03/2010 :
Buystop @ 8.65
Initial stoploss @ 6.80

I'm still in PACR and INGA

 

[makybe04]

Hi everyone,
Just wondering if anyone had any updated techniques to scan for early stage 2 Weinstein stocks like the OP mentioned?

 

[pavilion103]

Hi everyone,
Just wondering if anyone had any updated techniques to scan for early stage 2 Weinstein stocks like the OP mentioned?

I would be very interested in this too. Having just completed the book I'd love to test some of this stuff on scans.