Buy High, Sell Higher
April 6th, 2006* Or Sell Short Low, Buy to Cover Lower 
One of the first lessons you learn when you start investing is that despite the common sense life lesson that you should buy low and sell high, this strategy doesn’t work too well in the stock market. For most investors it doesn’t take long to learn this lesson – just take a look at the charts of this year’s best performing stocks. There was no opportunity to buy low for most of them!
We’ve heard MaoXian preach about this simple strategy for months now and the phrase is like a mantra in most of William O’Neill’s books on the markets.
At StockTickr, we put it to the test. We created a StockTickr user account called system that uses our pseudo-API to automatically add stocks to StockTickr that meet the following criteria.
The top 10 stocks that closed at new 52 week highs on the previous trading session, sorted by volume surge (i.e. stocks with big volume compared to their average volume) get entered into StockTickr with an outlook of long. These get tagged with the tags “long” and “New High on Huge Volume“.
The top 10 stocks that closed at new 52 week lows on the previous trading session, sorted by volume surge (i.e. stocks with big volume compared to their average volume) get entered into StockTickr with an outlook of short. These get tagged with the tags “short” and “New Low on Huge Volume“.
No fancy technical indicators, just price and volume.
We had originally started adding these stocks into StockTickr so that users could automatically add them to their blogs, like we’re doing here and TraderEyal is doing with his watchlist on his blog here.
But we quickly noticed that the system user, a completely automated process, was holding its own against some of the better traders on StockTickr. It’s not the best trader on StockTickr (as StockTickr Pro subscribers are well aware), but the system user is certainly putting in a respectable showing for a simple, unemotional approach to trading.
Check out the profit page for the new highs – they’re doing quite well. Even shorting the new lows would yield profits in spite of the market rising as a whole over this time period.
Each user and tag StockTickr have free RSS feeds associated with them, so feel free to add the new highs and new lows RSS feeds into your feed reader.
Related posts:
stocktickr blog » Blog Archive » How to Profit in the Market Using StockTickr Said,
April 18, 2006 @ 3:02 am
[...] Closely follow the system user – this automated process is adding notable stocks at the end of each trading day, including New Highs on Huge Volume. Read this post for more information. [...]