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  • ATAA Member since Mar 1992

Bernard Chapman is a physicist who was awarded a Doctor of Philosophy degree in 1968 by the University of Manchester and a Doctor of Science degree by the same University in 1978. He worked for CSIRO as a research manager in Environmental Science for 31 years.  He subsequently formed his own company in 1990 to market the Insight Trader software package that he had developed for his own investing activities. Insight Trader combines technical and fundamental analysis together with portfolio management and has been on the market now for 27 years.

Using Velocity and Behaviour to Select Stocks for your Portfolio

Posted: 20 November, 2017
Source: P2017 SYD Available to: Members

Like many traders one of the main requirements that we have when looking for stocks to purchase is that they rise strongly in price to maximise capital gain. Another requirement is that they are well-behaved so that this price rise is smooth and regular rather than thrashing about and triggering stops. A third requirement is that any stocks we own should be financially strong to avoid as far as possible those most likely to crash and burn.

To this end we have created the indicator of Velocity. It measures the rate of price growth based on the compounding rates of price increase from three separate time frames. A second indicator we have called Behaviour, that assesses a type of volatility that is not captured by traditional methods, allows us to select stocks where price growth is smooth. These two indicators, together with criteria that limit us to stocks that are financially sound form the basis of several systems that we use to build our portfolios.