Daily MA

Daily moving average stocks are those that are trading above their 20DMA, the 20DMA is above the 50DMA and the 50DMA recently crossed above the 200DMA. Also, the quarterly performance of the industry it trades in is beating the quarterly performance of the SPY by at least 4% and the price is currently trading between $10 and $20.

Criteria:

  1. SPY 50DMA > SPY 200DMA at the beginning of the trading week
  2. Daily Moving Average screener
  3. Quarterly Industry performance  is  4% >= Quarterly SPY performance

Trade Entry:

  • Use a 3x ATR to determine stop loss and position sizing.
  • The risk will not be more than 1% of account value
  • The dollar amount to purchase will not be more than 10% of account value
  • Set limit buy order at the previous closing price, or above if the technical show a strong open is likely for the next day

Trade Maintenance:

  • Maintain the 3x ATR trailing stop below the purchase price.
  • Add 1 risk unit each time the expectancy gains 1, but do not add more than 3 times

Trade Exit:

  • If the stock’s 50DMA crosses back below the 200DMA
  • If the day closes below the stop price, sell the next morning