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Young companies that are rapidly growing their sales (revenues).
New Technology Companies (NTC) Formula Companies
is a New Technology Company, or Formula Company has an annual revenue growth rate north of 20%.
When stock's 50-day moving average crosses over ("closes higher than") its 200-day moving average; and Only if the stock is currently trading above its 50-day moving average when this crossover occurs.
If the stock falls 15% from your entry price, sell the stock immediately.
If the 50-day moving average closes BELOW the 200-day moving average, sell the stock the next morning when the market opens. The trend is now over and it is dangerous to remain holding the stock!
If the stock rises 300% from your entry price, exit the stock completely and take profits.
number of shares to buy = (account size times the percentage risked on each trade) / (entry price - stop loss)
That being said, if you wish to maximize total trading profits over an entire lifetime, you should always wait for the moving-average crossover before you take profits.
It’s important to remember that when trading momentum stocks, you will have losses.
For every time that a stock recovers, there are two more times that a stock keeps selling off-- and even goes down to zero.
Stick with the trading signals (and your stop losses), and don’t try to second guess them. Learn to take losses and move on.
