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Saved by @SeekerHari

What is a True Market Leader / TML (Thread)

(And how to find them)

 In one sentence a TML is an institutional quality stock in a leading industry group with superior fundamentals and technicals

These are monster stocks which over the course of weeks and months increase +100% to +5,000%
TMLs are popular with traders/investors whose methodology is based on the CANSLIM system developed by William O'Neil.

He called them Model Book Stocks. Huge winners worth studying to identify common characteristics that they all share
O'Neil studied over 1000 model book stocks going back to the 1880s.

Many are shown and discussed in these must read books

How To Make Money in Stocks, O"Neil
https://t.co/S2sShZedUm

Monster Stocks, John Boik @monsterstocks1 https://t.co/Cw1O9ZazGO

https://t.co/1iAGYk6Brs
A Few Examples courtesy of @SystematiCK_

Pic N Save 1979

https://t.co/d03nEEF4Eq
Netflix 2009

https://t.co/Q7hI22VoMT
Home Depot 1982

https://t.co/hd5c3rm0Si
So what are the Fundamental characteristics of a TML?

Superior:

Quarterly Sales Growth > 25% YoY
Quarterly Earnings Growth > 25% YoY
Pre+After Tax Margins >20% Recent Quarters
ROE >17%
Annual Earnings Ests for the next year > 25%

Story- A new and innovative product or service
Not every TML will have all of these criteria, but in general their record should be outstanding with regards to most of them.

The higher these values the better. Earnings and Sales growth over 100% QoQ is ideal. Annual Estimates for next year over 100% would be exceptional
TMLs are also often in the Top 20 Industry groups at the times of their runs.

The TML is the leader of an overall top group which is riding the tailwinds of changing environments.

Recent examples $SE $SHOP $AMZN Retail-Internet
$TSLA $NIO Electric Vehicles (Auto Manufacturers)
Additionally base liquidity is required for these stocks to be institutional quality.

Dollar Volume > $30 Million is essential and most should have DV much higher than that

@Upticken Likes greater than $100 Million
Accumulation by big hedge funds and mutual funds like Fidelity Contrafund are what move the markets. They won't touch a promising stock unless it has liquidity.
Now for Technical Characteristics of TMLs:

Above a Rising 30 Week Moving Average
Breaking out of a Stage 1 or Stage 2 Base
Trending above Key Moving Averages (10, 21ema, 50sma)
Volume and Price contractions within bases
Up/Down Vol> 1.2
Huge gaps up on volume after Earning Beat
And most importantly they must be showing Relative Strength, meaning they are outperforming the vast majority of stocks in the market.

This. is. vital.

RS Rating over 97 is ideal
During corrections and overall market weakness they should be near all time highs, above their longer term moving averages

They should be standing out like a sore thumb.

@duckman1717 compiled a great resource for relative strength clues

https://t.co/zy3RUEYF9B
During Market Uptrends they should be trending above the shorter term moving averages, forming sideways shelfs during small pullbacks and then breaking out again.

Most stay above their 50 SMAs and even 21 emas for extended periods of time.
So how to scan for them.

Use @MarketSmith, the IBD Stock Screener, Finviz, or another screener

and screen for the fundamental criteria mentioned above
combined with the stock over the 200+50 SMA
It's helpful to have multiple screens splitting up the criteria for instance one scan for the earnings and one for sales.
On Fintwit we also have great traders who share their screens + focus lists.

@PatternProfits
@TMLTrader
@dennisc230
@alphacharts365

are a few who help keep me focused on TMLs
Along with the key books mentioned previously

The Lifecycle Trade by

@EBoboch
@KGD_Investor
@EricKrull1
@Top_Dog_102

Is a great resource which studied recent IPO super growth stocks and compared different rule sets to trade them

https://t.co/Ka6g7ND4uU
And Finally here is a good list of recent TMLs.

Study their charts, where you would have entered and exited given your rules

$LVGO 2020
$TSLA 2019, 2020
$DOCU 2020
$FSLY 2020
$PTON 2020
$SHOP Any recent year
$AMD 2018
$ZM 2020

More from Richard Moglen 📽️🦁🚢

Richard Moglen \U0001f4fd\ufe0f\U0001f981\U0001f6a2
Richard Moglen 📽️🦁🚢...
@RichardMoglen
“Sudden rises in price and volume, out of the ordinary relative strength, and movement against the general market trend are all giveaway signals which reveal the presence of a stock about to take off”

Nicolas Darvas
SCREENERS
Richard Moglen \U0001f4fd\ufe0f\U0001f6a2
Richard Moglen 📽️🚢...
@RichardMoglen
As Traders, Technical Analysis allows us to Judge Potential, Identify Accumulation, and Manage Risk.

It allows us to see through the noise and interpret price action.

Here is How To Read a Stock Chart For Beginners (Thread)

Let's start with the basics.

When you first pull up a stock chart you will see Price and Volume plotted versus time.


Each price bar represents one period of whatever timeframe you are on

Some people like candlesticks, I personally think Open/High/Low/Close (OHLC) Bars are more intuitive

For each bar/candle, the four important data points of each period are represented:

High
Low
Open
Close.


For each bar, we want to be able to determine whether buyers or sellers are in control and how much conviction they have.

To do this we use our tools: Price and Volume

Thing about turning a price Bar 90 degrees counter clockwise so the high is now on the left and the low is now on the right.

Then picture a game of tug of war with participants representing buying pressure on the left and selling pressure on the right.
TRADERLION
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Richard Moglen \U0001f4fd\ufe0f\U0001f6a2
Richard Moglen 📽️🚢...
@RichardMoglen
How to time the market (thread)

There is the old saying that “Time in the market beats timing the market” The chart below from Dr. Wish’s @WishingWealth presentation at the @TraderLion_ conference shows that to be false.

Full presentation: https://t.co/o2f21GBXci


The green line is unattainable realistically, however, missing volatile times during corrections yields better performance than buy and hold and we can aim for the green line.

Investors usually only show the gray and red results.

More

There are many strategies for investing/trading in the stock market operating within different timeframes and with different objectives.

That is of course what creates a market and opportunity. Timing the market may not be what works for you or what fits your goals/lifestyle.

However, everyone involved in the market is here to make money over time and corrections can cause huge drawdowns in the high alpha names negating incredible performance during strong market uptrends.
TRADERLION
Richard Moglen \U0001f4fd\ufe0f\U0001f981\U0001f6a2
Richard Moglen 📽️🦁🚢...
@RichardMoglen
What is an Optimal Buy Point? (thread)

Your results as a trader/investor boil down to three statistics

Average Gain - Average % gain on winning Trades
Average Loss -Average % gain on losing Trades
Batting Average - % of trades that are gains

Like in baseball, you can find incredible success in the stock market winning only a handful of times out of ten. In fact a system that is profitable or break even with only a 30-50% BA is more robust and consistent

To establish such as system you need to manage the risk reward relationship (Average gain/Average Loss) so that you can survive winning only 30% of the time.

(I promise this is getting to optimal buy points shortly)

You should shoot for at least a 2:1 gain/loss ratio. 3:1 is even better.

With a 2:1 ratio you can loss 2/3 of the time and break even. With a 3:1 ratio you can lose 75% of the time
TRADERLION
Richard Moglen \U0001f4fd\ufe0f\U0001f6a2\U0001f981
Richard Moglen 📽️🚢🦁...
@RichardMoglen
In the fall of 2018, I signed up for a class called "Introduction to the Stock Market and Technical Analysis" taught by Dr. Eric Wish

This class changed my life.

Here are 10 Lessons Dr. Wish taught me from his over 50 Years of Trading.

(Thread)

Before this class I had absolutely no knowledge about investing, trading, or how to read a stock chart

Today, trading & studying the commonalities between the greatest performing stocks is my passion, and what I’ve spent the past 1000+ days focused on

Now onto the first lesson

Financial Literacy

The first lesson Dr. Wish taught me was the importance of overall financial literacy.

Roth IRAs, interest rates, budgeting, building credit the right way.

You need to master money management before thinking moving on to trading/investing.

Overall Strategy

Throughout the class, Dr. Wish repeated his trading mantra.

As you gain trading knowledge and experience, you'll appreciate the simplicity and depth of this one sentence:


Determine the Market Trend

The vast majority of stocks follow the overall trend of the market. This is why the mantra begins with “In a Rising Market”

"At least 50% of the whole game is the general market."

-William O'Neil
TRADERLION , MARKET TREND

More from Traderlion

TraderLion \U0001f981
TraderLion 🦁
@TraderLion_
A Guide to Position Sizing

--- Thread 🧵 ---

To perform in the market, position sizing needs to be the main focus.

This is what ultimately separates the good from the great.

It will make no difference on your account if you have a 100% gain in a name with only 1% of your equity.

It will make a huge difference on your account if you have a 100% gain in a name with 20%+ of your equity.

There are 2 consistent ways to position size in the markets 👇

1️⃣ Position Size Based on Risk
2️⃣ Position Size Based on Number of Edges

1️⃣ Position Size Based on Risk

Before you take a position in a stock, you must know how much you are willing to lose on a trade.

We recommend never risking more than 1% of your overall account equity on any single trade, especially if you are in the consistency phase.
TRADERLION
TraderLion \U0001f981
TraderLion 🦁
@TraderLion_
The best traders take advantage of alternate entries to build positions before a stock becomes obvious to the crowd.

Here are 7 lesser known Chart Patterns that are a MUST in any trader's tool box 🧵👇


#1: Alternate Pivots

Alternate pivots offer earlier entries when compared to regular pivots.

These pivots are important because:

▪️ They offer the same if not better R/R then regular pivots
▪️ Less volatility around these areas
▪️ Allow you to start positions EARLIER


#2: High Volume Close (HVC)

The HVC is created from a big volume gap up.

The close of this day is an important point for institutions to support.

If institutions are in supporting this point, price should be very responsive - making it a great, lower risk entry.


#3: Pivot Retest

The pivot retest setup happens when price retests the prior support/resistance point & then rallies back through.

This can be a powerful setup as it acts as a 'shakeout' and reverses higher with stronger hands holding the name.


#4: In The Wick Setup

We are looking for stocks that open in the wick of the prior session's bar.

The buy trigger is when price moves through the prior day's high.

The stop loss should be the low of the current day.
TRADERLION , TRADING GUIDES
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TraderLion \U0001f981
TraderLion 🦁
@TraderLion_
4 Simple Steps to Avoid Downtrends 📉 (a thread)

🧵


1. Know the difference between an uptrend & a downtrend 📈📉

At TraderLion, we identify an uptrend as stocks/markets that trade ABOVE a RISING 21DSMA and 50DSMA.

A downtrend occurs when stocks/markets trade BELOW a downsloping 21DSMA/50DSMA.

Let's look at an example 👇

$QQQ from 2020 shows what an uptrend, downtrend, and even chop period looks like.


2. Know when it is really time to make money on the long side.

Swing Traders: when markets/stocks are above the rising 21D
Position Traders: when market/stocks are above the rising 50D

We can take this one step further by understanding what a Power Trend is 💪

The trend is really your friend when we have a Power Trend in the general indexes. A concept coined by the @IBDinvestors team, we must have the following:

✅ Low > 21ema for past 10 sessions
✅ 21EMA > 50SMA for at least 5 sessions
✅ 50SMA slope is positive
✅ Market closes up
TRADERLION
TraderLion
TraderLion
@TraderLion_
How To Execute when Trading (Thread)

Trading is a matter of preparation, discipline and execution.

Execution is about reacting to what we see on the charts in accordance with what you have already planned out when the market is closed.

The reason we plan our actions beforehand is because our emotions are at a lower state and we are more objective at that point in time.

Many traders often have the same watchlists going into the week but when the opening bell rings and setups emerge, the traders who can execute have the best performance.

Trading execution begins with research and preparation.
ALL , TRADERLION
Richard Moglen \U0001f4fd\ufe0f\U0001f6a2
Richard Moglen 📽️🚢...
@RichardMoglen
The Best Resources on @YouTube for Trading 📈📽️

(Thread)

Other than books, video is a fantastic medium for traders to learn about different methodologies & techniques

In this thread I’ll be sharing my favorite resources.

Keep in mind I gravitate towards channels which focus on providing real value over entertainment.

TL We work hard to provide the best growth trading educational videos out there.

Concept videos, interviews, webinars & the archive of the 2021 Trading Conference.

16 Presentations from US Investing Champs & Hedge Fund



Mark has great webinar archives and trade walkthroughs. He also throws in a bunch of drumming and shooting in there.

I highly recommend you watch this webinar he did with @dryan310 multiple

Financial Wisdom

This channel breaks down concepts & summarizes trading books in a whiteboard style which is very entertaining to watch and makes the concepts easy to understand.

Great
TRADERLION

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The UN just voted to condemn Israel 9 times, and the rest of the world 0.

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Australia, Canada, Israel, Marshall Islands, Micronesia, and the U.S. voted 'No' https://t.co/1Ntpi7Vqab


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