Scans and how to create a watchlist from "A complete trading system in your hands: A guide to trading an hour a day"
My notes on Dr. Mansi video series.
Notes:
I have spent the past two years researching swing trading, a method I consider to be the optimal balance between effort and gains. My journey began with Kristjan Qullamaggie, a legend in the trading world, who introduced me to one of his esteemed teachers, Pradeep Bonde. Within this influential group, I discovered Dr. Mansi, whose ability to simplify and articulate complex trading systems stands out as exceptionally clear and insightful.
I spent a lot of time looking at the details and ended up with over 70 pages of Dr. Mansi's explanations. I've simplified it since then. As a joke, I wrote it as a book and asked Dr. Mansi if I could put it online. So here it is:
How to create a list of earnings winners (EW)
Scan in TC2000:
Average volume over 1 Million shares
2 x the average volume
2 x ADR%
code:
v>2*avgv20 and c/c1>(1+(2*((avg((h/l),20)-1)))) and C>1 and c*avgv20>1000000 and counttrue(c<avgc20,40)>0 and (c>0 or c>((h+l)/2))
Checklist of an earnings winner:
Breaking out of range?
Old trend or new trend?
Catalyst?
Let's develop each idea:
Breaking out of range?
Old trend or new trend?
Simple rule: Don't buy a stock after it has made 3 legs up. Because the probability of a 4th leg is dramatically lower.
What is a leg?:
New Trend
We like this because it is starting a new trend:
Old Trend
We DON'T like this:
Catalyst
What is a stock catalyst?
Stock catalysts are events or factors significantly impacting a stock's price and performance.
There are two types of catalysts: stock-specific and group-specific.
*ER = Earnings. Biotechs normally don’t move on earnings but on research news (trial data or FDA).
Stock-specific catalysts include earnings reports (surprises that move the stock pre-market), new product launches, new CEO appointments, entry into new markets, new government policies, Partnerships, or joint ventures.
For biotech companies, earnings data is often absent due to their focus on experimental drug development rather than active sales. As a result, catalysts for biotechs are typically driven by trial data or FDA approvals, which can create substantial gaps in the stock and have a similar impact on traditional earnings as a strong catalyst.
Group-specific catalysts affect entire industries or sectors, such as regulatory changes or emerging technologies like AI.
How to find a catalyst:
Here is an Earnings winner. We see a stock that is breaking into new highs with volume.
Traders can use financial news websites like Finwiz.com to identify and assess the strength of potential catalysts. Reliable and high-quality news sources are important for determining the legitimacy and impact of catalysts on stock prices.
Look for breakouts in scans.
Go to Finviz and look for news (and who published it).
Ney Note: what is a strong catalyst? something that indicates future growth of sales. Better earnings are good too, but not so impactful. Also, they tend to be surprised by the market, so we scan for volume and intensity moves. If it weren't a surprise, then the price wouldn't move.
Examples of a stock that made it to the list:
Q: Do you focus on only “Earning winners”?
A: Yes, because she likes to know why stocks are moving. Earnings Winners are her only Universe.
“Focus On one setup. Else, you'll be the jack of all trades and master of none.”
When do stocks come off the Earnings winners (EW) list?
If the next quarter's earnings report (ER) announcement is coming out within the next week. If I already have a position in that stock, I'll hold it if I have enough cushion (Cushion > 3 Average Daily Range (ADR) of that stock).
For example, $TECK coming off the list because there's now enough “cushion” before earnings day:
ER on 4/26 [today is 4/24]
My entry: $44
ADR = 3.5%
Need stock to be > 44 * (1 + 3 * 3.5%) = $48.62, before 4/25 (tomorrow)
If the stock shows bad news,
Going down 2 ADR with a lot of volume.
Multiple down days on large volumes.
How I make my watchlist
One way of creating a watchlist for trading stocks is as follows:
Employ a strategy focused on trading "earnings winners" with strong catalysts.
Start by scanning for such stocks and pick a list of potential candidates.
To avoid short-term trades, remove stocks with upcoming earnings announcements.
Prioritize stocks with pullbacks and good setups, particularly those down less than one percent daily.
The final watchlist is narrowed to the top 10 or 20 ideas for the next trading day, allowing them to concentrate on the most promising opportunities.
Creates a list of stocks with news or catalyst for the next day.
Eliminate anything with earnings dates coming soon (within the next 5 days)
Sort them by “% change.”
Remove them if they fall more than 30%
She likes trading pullbacks, so we want to see the ones going down recently.
Check different timeframes and draw important levels. Support and resistance.
Set alarms.
Remove based on Risk reward; risky industries should always be treated like swing trades, etc.
HOW TO SCAN for Episodic Pivots (EP’S) AND Stocks in Play (SIPs)
In Tc2000:
Select “premarket.”
Look for companies that have gone up or down 3% or more, with a 1M volume min. on stocks over $10/share
c>1 = price is greater than 1. c*v = 1M (has traded more than $1M).
The rest of the formula shows gaps over 3% up or down:
Ney’s notes: why 3% most stocks move under this range, we are looking for outliers.
She uses stocks over $10 to find shorts, too (c>10).
If the chart looks interesting, she uses finviz.com to look for news on that stock.
Also, she likes something that IPO not that long ago (max 10 years?).
Ney’s notes: the idea of IPO younger than 10 years is because stocks tend to make it before this time or not make it at all.
*note: the natural gas industry, known as “the widow maker,” is choppy and volatile.
Don’t hold biotech overnight.
All right! You've got the technical part down. Let’s set up realistic expectations so you know what you are getting into:
How I Became a Full-Time Trader from "A complete trading system in your hands: A guide to trading an hour a day"
Notes: I have spent the past two years researching swing trading, a method I consider to be the optimal balance between effort and gains. My journey began with Kristjan Qullamaggie, a legend in the trading world, who introduced me to one of his esteemed teachers, Pradeep Bonde. Within this influential group, I discovered Dr. Mansi, whose ability to simpl…
I use chatGPT to translate the TC2000 script to TOS if anyone finds it helpful
def avgv20 = Average(volume, 20);
# Calculate the 20-day average of the high/low ratio (h/l)
def hlRatioAvg20 = Average(high / low, 20);
# Calculate the value you want to compare with (including additional calculations)
def calculatedValue = 1 + 2 * (hlRatioAvg20 - 1);
# Calculate the current c/c1 ratio
def cOverC1Ratio = close / close[1];
# Calculate the product of the current closing price (c) and the 20-day average volume (avgv20)
def product = close * Average(volume, 20);
# Calculate the number of times in the last 40 days when c is less than avgc20
def countLessThanAvgc20 = Sum(close < Average(close, 20), 40);
# Define condition (a) - Current closing price (c) greater than 0
def conditionA = close > 0;
# Define condition (b) - Current closing price (c) greater than (h + l) / 2
def conditionB = close > ((high + low) / 2);
plot scanCondition = volume > 2 * avgv20 AND cOverC1Ratio > calculatedValue AND product > 1000000 AND countLessThanAvgc20 AND (conditionA or conditionB);