The graph is showing that stocks with positive revisions outperform the benchmark. My approach is to find things that outperform the benchmark (and review them periodically) and then stitch a process around that. As opposed to using an unverified hunch.
Ok I thought that was the screen you ran for the top 5%. Minervini cuts losses quickly to control risk. What is your process?
He claims to have made something like 250% in the first seven months of the year swing trading equity breakouts. I find those numbers pretty hard to believe. Most likely he is faking the results; I doubt this 'contest' looks too hard, most likely they accept self-reported statements or balances without question. If he's really trading then he's essentially risking the whole account.
Have you checked out the contest? He says at the end of the contest he will release audited results. From what I am lead to believe his risk control is very tight. Very few positions but with tight stops.
That's all well and good, except the equity market was generally in a sideways/corrective phase for the first half of the year - and a lot of the high-beta stocks got totally crushed. Which symbols was he holding that tripled in value in <6 months while the broad market was correcting?
I don't know but you could run a scan to see which stocks were up more than say 30% during the first part of the year. Look for stocks that broke out of a base on volume. Check out the US investing championship site for a list of the monthly standings from the beginning of the year.
Thesis contingent, usually upon a catalyst. Cutting quickly = shake out, weak convictions, means you've not done enough analysis or have a strong view.
The international trading contest requires the contestants to provide broker statements. The fellow that won last year was up 941%. These two are equity swing traders using price action with a bit of funnymentals to boot. https://financial-competitions.com/
Cutting quickly to me means protecting my capital. You are right, I haven't done enough analysis to form a bias that might keep me in a losing trade. Stocks fall for a myriad of reasons, I can't possibly know them all. I'll just get out and see what happens. It is my process for controlling the risk that I will take an account decimating loss. I see no downside to being in cash waiting for a new opportunity.
That’s fine — there are lots of folks that do that. I have hard limits if my pnl breaches certain points. But those are beyond a 10% move typically. The problem with having stops is that when you are filled it’s typically in an adverse situation (e.g. at worst point). There was a study done awhile showing the performance of various strategies. Thesis driven approaches outperformed the most but hard stops as a % of pnl didn’t do too bad either — so that’s well within your purview.