Developing a Winning System for

Trading High-Performance Stocks

TIM CHO
TCI CORPORATION
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800-992-4625

Trading plan
1. Select high performing stocks
2. When to buy and when to sell
3. Money management
4. Risk management

Stock selection Criteria Long Position

1.

EPS rank 90 or higher

9.

Growth rate (annual compound) 25% or higher

2.

Relative strength (RS) 90 higher

10.

3.

SMR rank A

Consecutive yearly earnings increase (min. 2

years)

4.

Accumulation/Distribution (ACC/DIST) A
Or if accumulation/distribution (ACC/DIST) is B,
timeliness must be an A ranking to select the
stock

11.

Strong earnings estimate (next two years) 20%

or higher if earnings estimate only available for
one year; increase consecutive yearly earnings
increase to (min. 3 years)

5.

Timeliness A
Or if timeliness is B, accumulation/distribution
(ACC/DIST) must be an A ranking to select the
stock

12.

Earnings increase last 2 quarters 25% or higher

13.

Last 4 quarterly sales increase 20% or more

14.

No debt or very low debt (less than 30%)

15.

Top 3 stocks in the same industry possess high

RS rankings 90 or higher

16.

Funds and banks own total of 5% or more

6.

Group relative strength 85 or higher

7.

Number of outstanding shares 200 million or

less (the lower the better)

8.

Float 175 million or less (the lower the better)

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#1. EPS rank 90 or higher

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#2. Relative strength (RS) 90 or higher

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#3. SMR rank A

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#4. Accumulation/Distribution (ACC/DIST) A

Or if accumulation/distribution (ACC/DIST) is B,
timeliness must be an A ranking to select the stock

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#5. Timeliness A
Or if timeliness is B, accumulation/distribution
(ACC/DIST) must be an A ranking to select the stock

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#6. Group relative strength 85 or higher

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#7. Number of outstanding shares 200 million

or less (the lower the better)

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#8. Float 175 million or less

(the lower the better)

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#9. Growth rate

(annual compounded) 25% or higher

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#10. Earnings increased from previous year

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#11. Strong earning estimate

(next two years) 20% or higher
if earnings estimate only available for one year; increase
consecutive yearly earnings to minimum 3 years

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#12. Earnings
increase last 2
quarters 25% or
higher

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#13. Last 4 quarterly

sales increase 20% or
more

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#14. No debt or very low debt

(less than 30%)

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#15. Top 3 stocks in the same industry possess

high RS rankings 90 or higher

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#16. Funds and banks own total of 5% or more

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Stock selection Criteria Short Position

1)
2)
3)
4)
5)
6)
7)
8)
9)
10)

EPS rank 35 or lower

Relative strength (RS) 35 or lower
SMR rank c, d or e
Accumulation/distribution (Acc/Dist) D or E
Timeliness D or E
Group relative strength 45 or lower
Growth rate (annual compounded) 10% or lower
Earnings estimate (next two years) 5% or lower
Earnings increase last 2 quarters 5% or lower
Last 4 quarterly sales increase 5% or lower

Stock selection for trading both sides of

the market (long and short)
The system is designed to trade any stock that
moves in big trading ranges, up and down. The more
volatile the stock, the better the system will perform.
Look through Dailygraphs; use any stock that has a
big trading range moving up and down. Input the
stock into the TCI SOFTWARE and look at the
historical spreadsheet on the performance of the
stock. If the performance looks good and you feel the
stock will continue to be volatile, you may want to
select the stock to trade.

The Most Important Element

to Trading Success:
Knowing When to buy
and when to sell

System Trading

Stocks, S&P futures and NASDAQ futures markets historical time cycle correlation
Market Bias (Use the previous days cash market data of S&P 500, NASDAQ and DOW JONES) Use
the lowest and the highest price between 14:00 to the end of 14:29 time period as the goalpost, look for
the first break out within the next 30 minute (between 14:30 to 14:59)
Market condition Use %D on the daily chart 0 to 40 over sold, 41 to 60 neutral and 61 to 100 over
bought.
Market direction Use %D on the daily chart and the bend direction is the market direction.
Time frames when major institution and big market player come into the market (stocks, S&P futures
and NASDAQ futures market) between 14:30 to 15:00, (S&P futures and NASDAQ futures market) at
15:40 and again at 15:45 to 16:15
Most major economic news announcements are at 8:30AM and 10:00AM EST.
Best intraday trading (long and short position) move: EST 10:00 to 11:00 and 14:30 to 16:00
Best swing trading (long position) performing days of the week Monday, Wednesday and Friday
Best swing trading (long position) performing days of the month First 3 days and last 4 days.
Best swing trading (long position) performing months of the year November, December and January
Best swing trading (short position) performing months of the year February, June, September and
October

Money Management
1.
2.
3.
4.
5.

The total trading capital for day trading should be no more than
5% of your trading assets.
The total trading capital for swing trading should be no more
than 25% of your trading assets.
The total trading capital for long term trading should be no more
than 50% of your trading assets.
The increase of trading capital goalpost is based on 50%
reinvestment of your gross profits.
The key to success is discipline; keep your trading capital small
until you develop your skill to move up to the next level. You
have to earn your way up. Our goal is to use the powerful
compounding trading mathematics to build your account size.
Everyone has a different timetable to develop the trading skills.
To be successful in trading you need to have a plan to defeat
the market. The system is a part of the plan, but before you
trade you have to know your limitations. Everyone has a
different timetable to develop the skills to control the emotions of
trading.

What are the most common mistakes most traders make?

Failure to cut loses
% Loss of Trading Capital
5%
10 %
15 %
20 %
25 %
30 %
35 %
40 %
45 %
50 %
55 %
60 %

% Gain Required to Be Even

5.3 %
11.1 %
17.6%
25 %
33.3 %
42.9 %
53.8 %
66.7 %
81.8 %
100 %
122 %
150 %

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What Are The Most Common Mistakes Most Traders Make?

A)

Trading before acquire the necessary knowledge and education

B)

Trading more money than they should Lack of discipline and patience

C)

Lack of money management and risk management skills

D)

Increase position size after losses to try and make it back

E)

Trading with negative emotions

F)

Basing trading success on winning trades vs. losing trades.

G) Trading without a proven trading plan, a proven system or a proven

methodology.
H) Taking small profits and letting losses run: the primary rule to successful
trading should be cutting your losses short and let your profits run.

What is a successful traders psychological make up?

A)
Commitment
B)
High level of discipline
C)
High level of self-control
D)
Financially stable
E)
Know your limitations
F)
Self-motivated, driven and have a burning desire to
succeed
G)
Patience
H)
Meticulous, detail oriented
I)
Positive thinker
J)
Decision maker - Have the aptitude and the ability to make
sound decisions
K)
Leader
L)
Persistence

What characteristics are needed to be a successful trader?

1)

2)
3)
4)
5)
6)
7)
8)
9)
10)
11)
12)
13)

High level of discipline - follow the trading rules:

a. Cut losses.
b. Let profits run.
c. Keep trading capital small.
d. Follow all the system rules.
High level of self-control
Financially stable
Know your limitations
Self-motivated, driven and have a burning desire to succeed
Controlled emotions
Patience
Meticulous, detail oriented
Positive thinker
Decision maker - Have the aptitude and the ability to make sound
decisions
Leader
Commitment
Persistence
S

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What individual characteristics are not suited for trading?

A) Lack of discipline Guarantee you will fail
B) Lack of self control
C) Lack of commitment
D) Afraid to make decisions
E) Under capitalized
F) Out of control type, or overly aggressive individual
G) Highly and easily stressed individual
H) Negative thinker - negative outlook on life and always expecting the
worst
I)
Likes to blame others when things go wrong
J) Disorganized
K) Impatience
L) Crowd follower - this is a sure way to lose money
M) Compulsive gambler

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TCI CORPORATION
www.tcicorp.net
800-992-4625