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his chapter lists our first preferences in stock sectors we have experience with

.
The full Watchlist of stocks, most of which we have traded, together with some
basic outline information and company descriptions you will find in Appendix B a
nd
Appendix C.
We have our modified industry sector list in Appendix A.
Our definition of a cohort: Symbols which we have found to have similar trading
characteristics when they are defined by our metrics.
Here is a first, cursive narrative routine to get you started. The file COHORTS
on the CD lays out the routine in Excel.
The Price Tier metric is our first port of call. If there is sufficient capital
in the
account we have found that we have had more success trading the higher priced
stocks. We speculate that the higher priced stocks have a totally different owne
rship
profile to that of the lower priced stocks.
Trade 500 share lots as a stop gap if there is not enough cash in your trading a
ccount
to comfortably cover at least two 1000 share trades at the same time. A reasonab
le
start is to pick a stock in the $75 to $100 list.
Price is only one of many dimensions on which we can fingerprint a stock and
connect with its trading characteristics.
The volume level metric is the second stop on the tour. We are using volume here
as a proxy for liquidity. Do not trade any stock which has a three-session avera
ge
share volume of less than 1 million shares per day or has one of the three sessi
ons at
less than 750 000 shares.
The %RANGE metric requires careful handling. This must be looked at in context
of other stocks in the sector it also needs a series approach to see how the ave
rage
daily 200T %Range is moving. An EOD up trend over the last 5 days could mean
that this will provide more trading opportunities.90
The Leshik-Cralle Trading Methods
Intraday the %Range 200T is a good indicator of tradability, other factors remaining neutral. Ideally it should be over 0.002 at least half the time.
Do not trade stocks which have an EOD %Range of less than 0.002.
The traverse metric is a total of squared returns which shows the amount of
movement in the stock price EOD. It may be worked up to define a roughness
characteristic. The classic version used in this metric is n = 2.
Another version of this metric measures the price motion, or absolute traverse.
We
measure this over nT where n = 100 and 200 ticks which is then transformed into
series. We also take the same measure at EOD.
Over time one inevitably tends to collect favorite trading stocks. This is total
ly
individual no two traders will have matching preferences. These preferences evol
ve
from your trading experience.
We have drifted toward the oil and energy sector (e.g. RIG, OIH, FWLT, NOV)
with the pharmaceuticals (PFE, AMGN, BIIB, CELG) a close second. Our global
favorite stocks are CME,

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