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Finding #1 Stocks: Screening, Backtesting and Time-Proven Strategies by Kevin Matras

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Chapter 6

How to Trade the Strategies

Trading strategies like the Filtered Zacks Rank we talked about in the previous chapter or any of the other strategies we present in this book are easy to implement.

You will find that some strategies work better when traded or rebalanced once a week. Others perform better when they are traded every two weeks or four weeks. And still other strategies do better when traded every 12 weeks (like dividend paying strategies or even some value style strategies).

Either way, it only takes about 10–15 minutes to rebalance your portfolio, whether it’s once a week, once a month, or once a quarter.

Once a Month

In the first study we did of the Filtered Zacks Rank, we used a four-week holding period. To do that, you would run your screen once a month (every four weeks actually). On the first week—Monday morning—buy all the stocks that make it through your screen. Let’s use five stocks as an example. Each stock should be purchased with an equal dollar amount. In other words, an equal amount of money would be put into each stock for an equal dollar weighted portfolio.

Then you’ll hang on to those stocks for the duration of the holding period—which in this case is four weeks. Four weeks later, run the screen again and see what stocks come through. This time, you’ll keep the stocks that still qualify, sell the ones that no longer qualify (whether it’s a profit or a loss, you’ll sell them) and buy any new stocks that come through. That’s it.

So once again, ...

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