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HOW TO PICK WINNING STOCK (MARTIN ZWEIG)

1.0 ACTING BETTER
Look for stocks that are acting better than the other stocks, even in a weak market.
-AVOID STOCKS that haven’t been keeping pace, left behind, stocks wallowing near their lows,
weak stocks rising in a very lukewarm way.
2.0 CLEAR UPTREND
Look for a clear uptrend on a chart where you see a series of HIGHER HIGHS and HIGHER
LOWS, like a stepladder on the way up.
3.0 BEST BUY SPOTS.
Your best buying spots are short pullbacks or (“corrections” or profit-taking) of 5% to 10% from
the stock’s recent peak price. Buy when the price drops a bit.
4.0 BREAK OUT.
Look for a stock that’s just breaking out from a long “consolidation . Look for rising volume —
going with the rising stock.
5.0 SMALL GAINS.
Don’t buy stocks that will give you only 5% to 10% gains. It’s not worth the risk. It’s also a waste
of time and money.
6.0 BUYING MORE.
If the stock price just keeps on rising steadily, with “higher highs and higher lows” on the chart,
just hang in there and ride with the profits. If you still have more cash to spare, BUY MORE of
the same stock and “average up” as much as you can.
7.0 LOCK IN PROFITS.
Use the same “stop loss” to trail behind a rising stock. Let your profits ride as the stock keeps
on rising. As it keeps rising, also keep raising your “trailing stop” price—the price where you
get off when the price drops 7% to 10% . Once it drops to your target “stop loss” price, SELL the
stock and get your profits!
8.0 GETTING OUT
If a stock drops right away after you bought it, your “cut loss” selling price gets you out of the
stock with only a moderate loss. You still got most of your money left. This gives you another
opportunity to find a better stronger stock.

-CUT LOSSES. Let your profits run, but cut your losses short. Don’t wait too long, hoping the
stock will recover. In most cases, it won’t. If you bought a stock at 20, you won’t be badly hurt if
you cut loss by selling out at 17 for a 15% loss. You still have the bulk of your capital— to look
for better ,stronger stock

- STOP LOSS. Set your “stop loss” price at 7% to 10% below your buy price. For more volatile
stocks you can give more room at 10% to 15%

-SMALL LOSS. A small loss becomes a good opportunity for making profits elsewhere. This
gives you the chance to turn a liability into an asset— instead of just sitting there hoping and
praying that your dying stock will come back, with your losses becoming bigger and bigger

JESSE LIVERMORE, the greatest stock speculator who ever lived, said :
“ A loss never bothers me after I took it. I forget it overnight. But being wrong and not taking the
loss, that’s what damage your pocket. Of all blunders, there are a few greater than trying to
average a losing game. Always SELL what shows you a LOSS, and KEEP what shows you a
PROFIT.

JVILLAFLOR
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JVILLAFLOR