[isatrader]

The 4-th chapter contains some useful information that I haven't caught before. Let me quote the book:

"If it's acting fine, great, ride with it. But if it's lagging badly and acting poorly, lighten up on that position even if the sell-stop isn't hit. Move the proceeds into a new Stage 2 stock with greater promise."

It seems that the Stan's strategy is more active that I assumed before. He's not waiting for stop-losses or other clear signals to exit but instead jumping from one stock to another if he senses a stock is a laggard. I'm reviewing his recommendations from Global Trend Alert and most of them are laggards (if not losers). I would never beat the market if I stuck to his recommendations from the document and kept them for weeks or months. So instead there must be another element in the strategy that identifies lagging stocks.

Anybody has any thoughts or suggestions on this?

Industry Group Relative Strength is critical, as well as the four major components of the method of Price action, Volume Increase, Relative Strength versus the S&P 500 and no near Resistance/ Plus never buy stocks that have had big Stage 4 declines. Focus on those that have only had brief a Stage 4 and recovered back to Stage 1 quickly. If Stage 4 decline is more than 6 months then avoid. So stick to stocks breaking out of big bases on a large volume surge (ideally the most volume on the chart). Minimum 6 months+ for bases, ideally longer, and that will weed out the laggards.