BMI gets the axe.

I mentioned that BMI (Badger Meter Inc) might remain on my list of potential stocks to trade...I changed my mind.

I like a stock that has a very narrow bid/ask spread for a few reasons:

1) at the open there is less chance of a tight stop getting hit due to a wide spread
2) market order executions are more predictable, a penny here or there
3) wide spreads are indicative of low volume...or low volume creates wide spreads, whichever

My attention was too scattered over the past couple of weeks to really take note of the stocks that I was playing with or I would have realized that BMI is traded a bit thinly for my normal selections. The day is almost out and it has only traded 131K shares. While it is not too bad it has been brute in the morning as the bid/ask has been very wide right up to the last moment, today was a better day as my stop was wide and there was a $1 pop in after hours trading that pulled the last traded price up to $40. Alas it did not lead to a great jump in price. At least there is only about a 6 cent spread now.

Off to find some more selections to work with. Looks like PLCE and COP might be next in line.

My back testing takes forever but it gives me some feel for the stock leading up to the current period. I was doing a full year so perhaps I will cut it down to the last quarter or so. That is the most pertinent time anyway as trading patterns could shift over a year.

I am liking only having to loosely monitor prices during the day. Today I went ahead and set two limit orders for COP and PLCE to see if I would get in...very close. Within 12 cents on PLCE and COP may yet get nailed as it is at a daily low right now...23 cents off my order.

I will wait for my prices though, absolutely no price chasing in this plan.

Jeff.

Paring the list to the bone.

Lately I have been concentrating on four stocks. I realized that I might be able to handle trading two at the same time. I also realized that, amoungst these four that I short listed, most looked like the move roughly the same...some a bit more some a bit less.


I was trying to get familiar with a very few stocks to be able to make trading decisions on the fly and be more consitant in the gains...or at least to knew when getting out was prudent.


I have since changed my mind on that strategy and decided to go with only one stock. I chose the one that I have checked the most often...initialy because it was first alphabetically, second because it follows the TSX nicely and third because the price is small enough for me to trade 200 shares should I desire to. It wasn't the most profitable but was the most consistant in my trials.


In future I may go back to one or two of the others if this one changes it's pattern or response to the market in general.


So... the winner is ....

AEM - Agnico-Eagle Mines Ltd.


Trading between $50 and $60 right now.

Average daily swing greater than $1.50

60 days in the last four months the swing was greater then $2

Considering the average swing is about $1.50, that makes it about 2.7% swing.

Trading the first week 9 trades no losers



CNQ was the largest swinger at around $2 but the price was around $75 which is a 2.7% swing as well. It made more sense to have a smaller priced stock to allow more flexibility in position sizing rather than a larger price swing seeing as the performance is so similar percentage wise. Of 8 trades 3 were losers. It doesn't move as cleanly.



IMN was lower priced and higher swings but half the volume traded...just didn't feel as predictable in the moves, wider spread too so the slippage might be greater.

JD.