A Technical-Fundamental System for Stock Selection

by Wayne A. Thorp, CFA

A Technical Fundamental System For Stock Selection Splash image

Grant Henning—a trader, author and former university professor—believes that market trends will dictate whether to weight a stock portfolio toward value and earnings stocks or momentum and growth stocks. He also believes that the equity market goes through “predictable” patterns. By recognizing these patterns, he feels that it is possible to identify periods where it is advantageous to own stocks and when it is not.

Henning considers himself a swing trader, holding stocks for as little as a day or two or as long as a couple months. Having such a narrow trading window, in his opinion, allows him to take advantage of price fluctuations.

For his own trading, Henning defines success as averaging a 10% gain, per month, on his invested capital. If he fails to achieve this goal over an extended period of time, he will re-evaluate the system to see if adjustments are necessary or whether he needs to adopt an entirely new system.

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Wayne A. Thorp, CFA is a vice president and senior financial analyst at AAII and editor of Computerized Investing. Follow him on Twitter at @AAII_CI.


Discussion

James from New York posted over 3 years ago:

I like the idea of being able to stay in the game no matter what. As usual the idea require more research


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