Record Price Breakout Stock Screen

On May 17, 2008, In Stock Screens, by Steve Warshaw

Are You Tired Of Searching For Profitable Stocks?

Stock picking and making solid investments is overwhelming for many individual investors. There are so many books, websites, TV Shows, and even fancy software dedicated to helping investors find stocks, it’s no wonder people get confused.

I created Record Price Breakout.com to combat this problem. I spent years developing, testing, and refining ways of finding profitable stocks that anybody can use.

What Is A Stock Screen

A stock screen is essentially a method of use a database to filter out stocks based on specified criteria. In other words, it is a way to separate the real gold from the fools gold. The criteria can be a simple to very complex; filters range from searching by earnings growth, all the way to analyzing price patterns in the stock’s chart.

Record Price Breakout.com’s Stock Screens

The stock screens we utilize must meet 3 simple criteria:

1. Easy enough for the non-professional investor to utilize

2. Users must be able to execute the screen using only free resources

3. The screen must return stocks that are ready to make profit within 3 months.

Currently, we have 5 stock screens that we utilize, and are currently testing 2 more that we are optimistic about. Over the next 5 weeks, we’ll be producing videos that will teach you everything you need to know in order to utilize and profit from our research.

Our Preferred Stock Screen

The Record Price Breakout stock stock screen is the results of 18 months of daily testing and refining. I finalized the trading plan for this screen at the end of March 2008, and started trading using this strategy on April 1st, 2008. The portfolio for this screen has already turned in a net profit of 9.2% in 45 days, with 15 of 16 trades being profitable. Many of the trades are still active, and are increasing profitability daily. The link below will show you the entire history of every trade made using only this stock screen.

Follow the Record Price Breakout.com Portolio

Nuts and Bolts

Here is the trading plan for this screen:

The stock must have recently reached an all time high in price (hence, record price breakout)
The price breakout must have occurred on very strong volume
The stocks P/E ratio must be at least 33% lower than the industry average P/E ratio in which that stock lives
Optional – Ideally, the price breakout will confirm one of these known price patterns

If you are unfamiliar with stock price patterns, click on the links above; stock price pattern education provided by my friend John Lansing at Trending123.com

Big Fat Reminder!!!!

You must still diversify your stock portfolio across several different industries, choose stop levels (price as which the stock is sold automatically if it gets that low), profit levels, and you must manage your position size. If you’re not familiar with all of these concepts, please do some research diversification and trading plans before purchasing any stock

Using The Screen

The following video will help you to choose winning stocks using the Record Price Breakout screen.

And…Unlike most online stock picking strategies or courses, everything you need to use this strategy is available on a free website.

Part 1

Part 2

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Steve

Hi,
I clicked on the link from your first post to look at your portfolio on ClearStation. Do you only have one position being followed- a short on FRO? If so, how do I get to the results of your trades from these last few months?
I like your explanations and the simplicity of your approach. You understand that the plethora of trading strategies and information out there make it near impossible to settle on something unless there's data that it works, and strategies like yours can't really be backtested. It makes it hard to know whether the results are real or outliers, but doing well over the past few months would give some confidence to the approach.

Steve Warshaw

@Steve,

Unfortunately due to a "glitch" in my account, the portfolio history has been lost.

However, I don't think backtesting my strategy is impossible. Depending on your trading style, in this case whether you are a short term type trader or if you like longer term trades, you can backtest in different ways. If you're a short term trader, backtest by picking 52 week highs (for short term trades) 1 - 6 months ago. If you like longer term trades, try to pick all time highs with the past 6 months to 5 years (depending on how long you like ot hold trades open).

Speaking of backtesting, do you have software with a trade simulator? I'd be curious to know what you are using.

Steve

No, I don't use any software. I've been in school up until recently (no money to trade), so my trading experience consists of reading too many articles about trading strategies and getting frustrated by the ambiguity of it all. I did spend a few weeks using a free trial of Zack's Research Wizard, and was impressed by the returns some of their packaged strategies made, but that system costs quite a bit relative to my trading account. I'm trying to learn something I'll use once I have an account worth trading, but it's a bit difficult for me to stick with paper trading.
How long have you been trading? Do you use your ClearStation method with a real account, or is it something fairly new you're trying out on paper?

Steve Warshaw

Hi Steve,

I think you should take a look at http://www.sharebuilder.com, as it is a perfect broker for novice traders regardless of the size of trading account. The concept behind their strategy is very simple:

By picking great companies to invest in over a long period of time, and using a concept called cost averaging, you can take advantage of the fact that over time the market always rises. They also give you the ability to buy fracitional shares, which is great for investors just starting their accounts. Here's a link to Sharebuilder's articel on dollar cost averaging.
http://www.sharebuilder.com/sharebuilder/plan/a...

Let me know what you think of Sharebuilder; if that trading style doesn't interest you I have some other suggestions.

As far a ClearStation, I do use that strategy, as well as others in my trading account. I don't post which trades I actually make legal reasons, but some of the stocks I own I find using that strategy.

Ace

I like your approach but the videos aren't working...

A place to find stocks that recently reached an all-time high price is alltimehighstocks.blogspot.com

Steve Warshaw

Hi,

You're right, for some reason the video links were broken. I have fixed those. I think an old plug-in I was using for wordpress stopped working.

BTW, no problem plugging your website here, but it would be great if you gave some more background in your comment.

Ace

Hi Steve,
Thanks for the videos. Great site.

My approach is similar to yours in that I focus on stocks making new highs. I typically trade long time-frames so, ideally, I speculate in stocks making all-time highs because they have no overhead resistance. My approach is to start with a list of new all-time high stocks and then narrow my selection based on volume, T.A., and other criteria. Stop losses, position sizing, and risk management are all key components.

Steve Warshaw

Hi!

It's good to see other people trying to make use of breakout stocks. It seems pretty obvious to me that stocks make new highs for a reason. When those stocks are "cheap", makes sense to buy them.

What types of other criteria do you short with?

mikesmith1984

How can I get this tool and the other tools you have created and show on your blog?

thetradedetective

The record price breakout stock screen uses clearstation.etrade.com. Did you
happen to watch the video?

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