Buy Shares And Set Target Profits
67It’s the next day in my experiment. If you remember, each day I buy shares of stock of a company that passes through the IBD Top Composite 200 stocks based on the screening strategy discussed in my buying shares from scratch article.
This is really getting interested because I am looking for stocks that are being pushed higher in price by the big money and that also have strong earnings and sales. These are what are called growth stocks. From my research growth stocks have the most potential for the fastest return. Numerous strategies for buying stocks exist and we are testing this one.
As I have mentioned before, hone in on one strategy and start working to perfect your methods by buying shares using a simulator. Learn the mechanics and start working on refining your steps to implementing it and don’t flip flop from idea to idea. It’s easy to get lost in a sea of great opportunities. Be an expert on one.
Shares I Bought In The Simulator
- Buy Shares From Scratch
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Yesterday’s top 200 composite stocks brought the following candidates to the surface.
Stocks up 2% in price, 100% in volume and volume of at least 100,000
Ticker symbols: lion, bcsi, neog, arun, vit, msn, dmnd, wbmd
Stocks with earnings and sales of at least 25% or more
arun, wbmd
Stocks that met all the criteria for smart select ratings
arun
ARUBA NETWORKS INC (ARUN), 13.36, earnings were up 300% last quarter with sales up 31.41% and all the smart select ratings met the and were 97, 81, 94, B, A-, B+. I purchased $1000 of ARUN in the simulator. Here’s the chart.
Today I wanted to talk about formulating a trade setup and exit strategy. For this experiment, I am buying shares online trading on the open and closing data. There will be no intraday trades. Each trade will be review at the end of the day to see if it triggered a stop to get out. I am not using hard stops in this case, only mental ones. My reasoning is that in a real market, I think that this data is available for traders to steal shares away (just a hunch) and I don’t want to tip my hand. We will see how this plays out. For each trade, I’ll list my entry point, number of shares, what my profit target is and what my initial stop will be. For these shares I will use stockbee’s recommended 2 days low and set a profit target of 20%. My goal is to achieve a 3 to 1 meaning I’m hoping that to learn how to buy shares and getting a winner for every 3 stocks I buy, that one will reach it’s profit target.
Bought: 74 shares at $13.36
Stop: $12.21
Target price: $16.03
So those are targets for this stock. I’m hoping that using these numbers and choosing these shares to buy through the simulator will produce the target profit, but will exit immediately when it hit’s the stop.
Talk to you in my next article and remember these are not buy recommendations.
