My 7-Star Winning Trading Strategy (the JG-7)

   Picking a winning stock is crucial to winning. My 7 star stock picking strategy offers a layered approach to picking a stock. As you shop for stocks, apply the 7 criteria. For each of the criteria met while analyzing stock metrics, apply a star. Obviously, the more stars the merrier!

1)    Is daily volume up over positive price change?

2)    Is OBV trending upward?
(fairly straight rising diagonal line?)

3)    Has volume moved above 20 day MA?

4)    Does SAR indicate positive price positioning?

5)   Is daily volume at least 200k+?

6)   Is stock gaining on or beating daily average volume?

7)   Is stock trending upward?
If in consolidation/sideways pattern,
has price history moved below/above current price at least twice?

Rationale:

It’s an obvious indication a stock is gaining momentum when its share price rises. Using this basic criteria for finding stock candidates should help narrow the playing field straight out the door.

Volume is without question the most valuable indicator of a stock’s performance. Volume alone, however, says little about the direction of a stock’s price. If volume increase or decreases, it says nothing about how much of that volume was derived from buying or selling. OBV, however, subtracts buying from selling to give you an idea as to whether or not the stock is being bought or sold.  OBV is an invaluable indicator, showing you the direction of price.

If volume breaks through recent moving averages, it’s a good indication there is much interest in the stock. Be sure to assess whether or not the moving average was broken based on positive price movement. If price moves down on high-than-usual volume, that’s a sign the stock is failing.

Watch the SAR closely, studying recent price performance in conjunction with trend continuations/reversals to gauge whether or not the stock is aligning for a positive/negative alignment.

If a stock price was moved below or above the current price at least 2 times in history, it is a good indicator that the stock and underlying sentiment towards the stock is resilient. History has a way of repeating itself.

Ensuring the stock has traded on or above at least 200k shares a day covers the fluency of your entrance/exit of a stock, reduces volatility, and rapid price decreases.

Never trade into a down-trend. Look for stocks poised with an upward bias. This seems simple enough, but way too easy to forget!