AlphaKing.com Chart FAQ:
Q: What do the different Charts Mean/How should I read the Charts?
A: Please view the AlphaKing.com Chart Tour. It provides an in-depth guide to all the information presented on the AlphaKing.com Charts.
Q: Why have there been no new buys recently?
A: When the stock market is in sell mode, per the AlphaKing Trading Indicator, no new buys will be issued by our system until that changes. The results shown for each stock are based on such a stock market weighted approach.
The results were overwhelming when we tested using the stock market as a timing tool for indivudual stocks, showing that traders are much better off staying in cash while the stock market is in sell mode, rather than either trying to hang onto long positions, or even seeking out stocks that are holding up better than the market.
Our approach uses whatever works the best, and the answer is clear: Stock market sell signal, then stay in cash....
Kevin Wilde, Chief Trading Strategist.
Q: Why do you trade your stocks all at once?
A: The last step in the AK Research Project Article over in the Tours section explains why, and improved results from linking stocks to the market, versus letting them do their own thing. When the AK Market Indicator is in buy mode, stocks are sold when they trigger sell signals based on the AK stock indicator.
Q: What is the average drawdown from the high in your sell signals?
A: We don't know the answer to the draw-downs from the high. All tests are run on money in the bank after the trade is closed, versus all other methods. We have done a ton of work on trying to lock in profits sooner via tigher signals and they make less money over time than our current approach.
A glance at the arrows on the charts of stocks shows that sometimes the AK system sells too soon, sometimes too late, and sometimes spot on. The current set up makes more money than all other trading methods.
Our system works on buying portfolios of great stocks when the stock market flips into buy mode, with the view of trying to hold onto them until the next sell signal, while letting winners run, while cutting losses on the weaker stocks quicker.
There are 3.1 new buys for the stock market each year, on average.
We are simply focused on selling when the AlphaKing Trading Indicator is in sell mode - adding shorts for the portfolios that trade short during the sell signal - and letting the stock market do its thing until the next buy signal. Then we'll load up long again. And repeat. And repeat.
I can say with some confidence that a drop of a certain percentage from a peak will be a great ENTRY opportunity only if the stock market moves to new highs after purchase, while the same drop for the stock will be a great EXIT signal if the stock market flips into and stays in sell mode.
Since one never knows which dip is which, all we can do is run tests on all dips, and all rallies, to see which set of indicators make the most money with the least volatility overall.
Q: What do growth value, revenue value, etc. mean in your fundamental rankings?
A: The most important element is whether a stock is labeled an AlphaKing or not, since that means a stock has passed all selection criteria. An outstanding growth/value simply means the stock is cheap based on its expected growth, while an average means it ranks near the middle of the pack based on such a score, while a below average means it is expensive based on its growth. The exact construction and measure used is proprietary.
Q: Why don't you use stop orders?
A: Stops don't work, though technical trend-following triggers do.
Think about it thusly: you enter a stock trade with about a 50-50 chance of making a profit. If you set a stop, then maybe 1/2 of your would-be winners will be stopped out, along with the other 1/2 that were destined to be failed trades. That leaves a 25% hit rate, and that is tough to overcome.
Technical trend following triggers, on the other hand, also work 50% of the time, with zippo reduction for anything other than what the trend following signal is destined to deliver on over time.
In testing, these technical trend-following triggers have approximately a 10% average loss on the failed trades, though any one trade can be significantly higher.
You can see this at work by pulling up charts on the main chart page, and looking at the average loss, then take a peek down the full trade list. diversification helps smooth some of those larger than would like to see drops.
Traders and investors can set stops with any of our positions if they like. If a position does trigger an exit signal after puirchase, it will be replaced with another pick if the stock market trend remains in place. We use the Alphaking Trading indicator - for the stock in question - to trigger exits in our positions once entered.
Q: I trade short-term. What do you have for me?
A: Many shorter term traders trade in and out of our stocks, so that is something to consider. Our trend following approach should be useful at highlighting the direction of the trade. Consider both a momentum approach - where a short term trader puts on trades when the stock market is banging - and a buy the dip contrarian approach, since these down zags occur frequently during intermediate term rallies.
Our fundamental rating will be helpful at highlighting stocks with the best fundamentals, no matter what entry and exit or time frame approach you use. The new buy signals accessible via the screener may also be helpful at pulling up stocks that issuing new buys.
Results are tabulated using the opening price the day following a new trading signal, and exclude commissions, dividends, or interest paid on cash balances during sell periods. Stock prices highlighted in blue are temporary - using the end of day quote the day a new buy or sell signal is generated - with the final price adjusted the following trading day when the opening price is available. Past performance is no guarantee of future success
The AlphaKing.com website, and the emails we send, are for information and educational purposes only. Trading stocks is a high risk investment strategy. The information is neither a recommendation to, nor an offer to buy or sell securities or stocks. Traders should do their own due diligence research before acting on any financial information, whatever the source of that information, including the AlphaKing.com website and newsletters. If you act on any of the information furnished by AlphaKing.com, either on our website, email newsletter, or anywhere else, you do so at your own risk. Read the Full Disclaimer.