Kardec Trader breaks down four rules for finding winning stocks: target $50M+ average daily dollar volume, pick stocks in strong groups, seek volatility with 3%+ average daily range, and require relative strength during consolidation.
I like to trade stocks that are fairly liquid, an average daily dollar volume of at least $50 million. The other thing that I want to see in terms of stock selection is the group strong. I want to see group strength. Other than this stock that is setting up, I want to see stocks in that same group also set up. In terms of the volatility of the stock, I prefer stuff with more than 3% ADR. So on average, I want to see that it has the tendency to be able to make big moves in a short span of time. So anything less than 3%, so for example like a bank stock, I'm not too interested. I want to see the growthy type of names. They usually trade with more than 3%. The other The other thing is relative strength. As the stock is consolidating, I need to see it show relative strength towards the market.
