Every morning I go through a few of my scans to find buy candidates for the day. Depending on the current state of the market the size of the list will vary, usually its no more than 50 names. My process is based on market structure not on beliefs or myths of what works– or what doesn’t work. They are certain behavioral patterns that have been around for 100 years that are based on market structure, these behavioral patterns are recognizable, observable, and quantifiable. On daily basis we have 5,000 stocks that we filter based on certain market structures that gives us an edge of a higher probability than a random outcome. Once the list is narrowed to a handful of names the market will further narrow down the list by getting us in or keeping us out of these names with a range expansion move.
I don’t look at charts in your conventional cookie cutter manner, or have rules as to where the stock should be whether its 15% off its 52 week highs or above or below certain moving averages etc…
These are what I consider “tight set ups” that will trigger a buy signal for me if and only when they break the previous day's high. On a regular trading day I would indiscriminately take every trigger because you just don’t know which one will be the big winner, you might have an idea but in the end you don’t know.
How much you put at risk per trade depends for the most part what your current outlook is for the market over the next 0-5 days.
Put these names on your trading platform, set the alerts at yesterday’s high for each name, once the alert goes off take a look at the chart, decided within 3 seconds whether or not you are going to buy it, decide how much you want to risk on the trade and your stop loss, hit the buy button, and leave the rest up to the market, wash, rinse, repeat.
Frank Zorrilla is the founder of Zor Capital LLC a New York based investment management firm. Our goal is superior performance, with preservation of capital as our number one priority. Zor Capital manages separate accounts (both taxable and retirement) for accredited investors and institutions. This structure gives clients access to a hedge fund like strategy while maintaining 100% control of their accounts. Managed Assets
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