Bullish Trend Tactics for the Small Trader

Generally speaking, this tactics should be applied when the market is clearly bullish.  There should be a consistent growing on the market indicators such as the Dow Jones, S&P-500 and NASDAQ indexes. The recipe is as follows:

	Get a pool of candidates to be analyzed, based on fundamental data.  Look for stable and healthy companies, for example having a market value > 1 Billion, both Revenues and Earnings growing in the last 3-5 years, Current Assets growing or at least stable, Long Term Debt stable or decreasing, and Debt Service no greater than 30% of the Gross Profit. These are general basic ideas, you may add more to filter.   Renew this list monthly or quarterly.
	Review the technical charts of these candidats. Look for prices going bad, decreasing or moving sideways in the last 2-3 months, and then with abrupt change in the tendency, preferible with high volume, greater in at least 50% more than the 3-months average.
	Look for prices going higher (higher highs and higher lows) for at least 2 or 3 days, after the turning point described above.  The perfect entry is when the last day analyzed has a modest increase in price with strong volume, above the average.  If this is the case, be prepared to jump in the next day.
	Double check again the fundamentals, and review the latest news of stock or the industry.  However, don't overdimension them.  Look for big issues such as CEO removal (this can be good), a recent deal that may be key for the company's future, a programmed acquisition, etc.  Don't pay attention to little things, or adverse news that don't touch the fundamentals of the company's business.
	Plan your stop loss.  Calculate the ATR, which will define your estimation of the noise of the market for that stock. Assume for the moment that your enrty price will be the close level minus half ATR. Identify the support and resistence levels, based on previous minimums and highs.  Set your stop loss on the entry price minus two ATRs.  Check it in the chart to see if it is above the support line (if so be cautious, this is risky).  The best picture is a stop loss below the support line, and the resistence line below the entry price + 2 ATR.
	Estimate your loss if the stop loss is hit. If it is greater than 10% of your total capital, it is too risky, don't jump in.  Have in mind that as you grow, this limit should be reduced to 2%.  You may adjust the number of stocks to buy to keep you maximum loss acceptable.
	Plan your entry.  As mentioned, you should expect to enter with a price equal to the previous close minus half ATR. This is the ideal and safest situation. Start by setting a buy limit with that price.  The next day, it could happen that the price gap up, meaning that will open with a price higher than the close.  The recommendation in that case would be to watch the price and if it doesn't goes down for 1-2 hours, but goes sideways or increases, consider jumping in at a price no greater than the open price plus half ATR, or a full additional ATR if you see a lot of volume buying (it could be the start of a big jump in price for the day, and you want to catch it early.)
	Adjust your stop loss to your entry price or previous close or todays open (whichever is lower) minus 2 ATRs.