Saturday, February 14, 2015

Expanded Universe

Recent changes to the code and database underlying my analytical operations have produced a 10-fold increase in processing speed: From a seven-hour slog overnight to a 40-minute sprint. See "Prospects list status" for a description of the problem.)

The increased speed gives me an opportunity to widen the field of stocks and exchange-traded funds that I analyze each day in my initial screening, which I use to identify potential trades. (Such as this post from Friday.)

My screenings all pull from the Zacks Investment Research data. If Zacks isn't covering a stock, then I don't look at it. This ensures that any stock I cover has a lot information available about it.

The screen I've been using since September 2014 had these minimums: A closing price of $15, an average volume of 500,000 shares a day and market capitalization of $1 billion.

That screen produced an analytical universe of 1,233 stock symbols in the most recent week, all from among the large- or mid-cap stocks.

The new screen that I'll be using this week for the first time retains the minimum closing price of $15, but reduces the average volume to at least 100,000 shares a day, and removes the minimum market capitalization entirely.

The new screen produced an analytical universe of 2,379 stock symbols in the most recent week, with the additional coverage coming from among the mid- and small-cap offerings.

I don't anticipate many trades coming from the additional coverage, although I might be wrong in that assessment. I do expect the broader universe to give me a better sense of the market context when I look at the numbers each day before the opening bell.

Regular readers know that my trading method focuses relentlessly on the individual stock, not the market as a whole. Yet, the broader context plays a role in my decisions to take a trade or not. A bear play in a strongly uptrending market is more of then than not a losing proposition.

I also won't be surprised if I find it useful to tinker with the new screening criteria.  Any system can be improved, and this one is certainly no exception.

-- Tim Bovee, Portland, Oregon, Feb. 14, 2015


My shorter-term trading rules can be read here. My longer-term trading rules can be read here. And the classic Turtle Trading rules on which my rules are based can be read here. My volatility trading rules can be read here.


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Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.
No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.

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