Trading based on finding stocks in Stage 2 uptrends can be mechanical as long as we define our Sell rules, stop loss rules and buy criteria. For buying criteria, I’m going to insist that the price is above the 50dma, which in turn is above an upward sloping 200dma. For sell criteria, I’ll say that we sell if we hit a 10% stop loss below the purchase price or if the price goes below the 50dma.
As an experiment, I’ll run a simulation buying the following stocks during the day tomorrow (Thursday 9/5).:
FOUR, ASPN, ONON, NU, MELI, MO and ZETA.
I’ll track the simulation and report the results here periodically.