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Use both Fundamentals and Technicals to Swing Trade like a Pro

Stop seeing half the picture! Use both types of analysis to determine proper entry into well-defined trades. We will likely lose more often than when we win, but the wins will be big and the losses small. The goal is to find trades with limited downside and good upside, usually about a targeted 10% over two weeks.

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  • 5.38%

    90 Day Performance
  • 18.44%

    365 Day Realized
  • 5.9%

    Avg. Trade Gain
  • 172

    Total Trades
  • 43.00%

    Win Percentage
  Symbology Position Quantity Entry Exit P/L ($) P/L (%) Entry Date Exit Date
URI Short -350.00 $89.30 $95.17 $-2,054.50 -6.57% 03/05/2014 03/31/2014
AVP Long 2000.00 $15.20 $14.41 $-1,580.00 -5.20% 03/03/2014 03/31/2014
FULL Long 3500.00 $8.89 $8.69 $-700.00 -2.25% 03/10/2014 03/27/2014
AEO Long 2400.00 $13.51 $12.99 $-1,248.00 -3.85% 03/11/2014 03/24/2014
MASI Long 1150.00 $26.62 $28.16 $1,771.00 5.79% 02/26/2014 03/11/2014
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The Analytical Trader by Alan Brochstein

Every trader would love to enter only winning trades, right?  

This isn't realistic, though. Stocks fluctuate for many reasons, often inexplicably.  I have found over the years that the real challenge to trading success is sticking with losers and hoping that the trade turns around.  They don't.  Similarly, many traders don't stay with a trade long enough, slapping themselves on the back for a single that could have easily been a double, to use baseball talk.  

While there are trading systems that seek to identify more winning trades than losers, with the hope that the net result is positive, my approach is different.  Instead, I try to find situations where I think that the downside in the short-term is limited but the upside is 10% or so within two weeks, depending on the volatility of the stock.

When I structure a trade, which is designed to expire after two weeks and usually does so more quickly, I look for situations where I think that the up/down ratio is at least 4X.  This is typically, then, trying to make 10% but risking 2.5%.  The beauty of this philosophy is that that one can be wrong more often than right, but still do very well.  Here is the math, based on trades that close right (10% gain) or badly (2.5% loss):

In this example, as long as the trades work just once every five times, we break even (before consideration of commissions).  On the other hand, the two-week return is 1.7% if we are right only one out of every three times!  1.7% may not sound like a lot, but there are 26 two-week periods in a year.  Just multiplying the 1.7% and not compounding it, this would be an annual return of 44.2%.

Now that I probably have your attention, it should be obvious to you that we don't expect to win more often than we lose.  The reality is that when you control risk tightly, you will get stopped out a lot.  We are able to win big when we do win, and we stick to our discipline at all times.  

We are looking for short-term opportunities, willing to risk only a little and understanding that we may lose more often than we win, but the wins are so much bigger than the losses that they net result is a win where it counts - the wallet.  We rely on both Technical Analysis and Fundamental Analysis to pick these trades, and we are always disciplined in how we manage them. 

What you get with The Analytical Trader

  • Chat Room

    The chat room provides an active community for members to discuss ideas, trading strategies and get market moving news in real-time. The community is made up of market experts, mavens, and other traders with the same strategies as you. It’s also a great place to get assistance and help.

  • Trade Alerts

    All trade alerts are verified by Marketfy’s proprietary technology that tracks, verifies, and delivers alerts in realtime via email, text message, and the Marketfy activity feed.

  • Education

    Learn about the markets in the fastest, most effective way from mavens and other industry experts. Whether you want to learn to trade full time or just generate an extra monthly income, the education will shorten your learning curve and improve your results.

  • Blog Posts

    Receive access to Alan Brochstein's latest blog posts as well as an archive of his past entries. These blogs will help you keep up with insights on past trades, thought on current market conditions, and will update you on Alan Brochstein's upcoming events and appearances.

  • Portfolio

    Maven portfolios are generated automatically by Marketfy’s verification technology - removing all human error and manipulation. The full performance history compiles every trade alert issued and are 100% transparent.

Latest Activity from The Analytical Trader

Is This Product For You?

Content:

  • Trading: Stocks
  • Asset Class: Options, ETFs
  • Frequency: Swing Trading

Requirements:

  • Experience Level: Beginner, Intermediate
  • $25k in Trading Account

Goals:

  • Learn to trade Options & ETF effectively.
  • Make that money, honey!

Market Insights from Alan Brochstein

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Trading Style & Goals

Trading Style:

  • Type of Trading: Stocks.
  • Frequency of Trading: Swing Trading.

Goals:

  • 4:1 or better risk/reward within 2 weeks

Requirements

  • Margin account (for short sales)

Alan Brochstein

I have worked in the investment industry since 1986 and earned the CFA charter in 1997. I worked for Kidder, Peabody in bonds from 1986-1992 and then First Boston's investment management subsidiary from 1992-1994, both in NYC. I then joined Criterion Investment Management (later acquired by Nicholas Applegate and then West LB) as a portfolio manager helping to manage $10 billion in fixed-income investments. In 2000, I made the move to stocks, joining a small firm in Houston as an analyst and portfolio manager. I left in 2006 and formed my own business, AB Analytical Services.

From 2007 until March, 2014, when I made the decision to devote my time exclusively to the cannabis sector, I worked as a research consultant to several investment advisors. Additionally, I offered a model portfolio service to individual investors from 2008 (www.InvestByModel.com), adding a private blog in 2011. In 2009, I began working with an independent research firm that focuses on evaluating the management teams of publicly-traded companies. In 2013, I came to the Marketfy platform and launched The Analytical Trader, with the goal of providing swing-trading ideas that would offer 4:1 reward-to-risk over a two-week time-frame. Later in the year, sensing an unmet need in the market for objective information on cannabis-related stocks, I launched 420 Investor as the go-to place to help investors capitalize on the "Green Rush". Finally, I have been one of the most successful bloggers at Seeking Alpha since early 2007. You can access my 600+ articles at http://seekingalpha.com/author/alan-brochstein/articles

I am very dedicated to the idea that people can manage their own money and get market-beating performance at a reasonable all-in cost, avoiding costly middlemen who tend to deliver mediocre performance, at best. My goal is to help you by providing ideas that are based on sound processes and decades of experience, letting you make the ultimate judgment regarding the commitment of capital. I enjoy interacting with subscribers and look forward to working with you.

You can find me on LinkedIn: http://www.linkedin.com/pub/alan-brochstein/1/182/165