A 5 Step Guide To Building Your Own Model Book

and how you can change the trajectory of your trading career with 15min of focused analysis a day...

Aug 06, 2023

To catch future winners, you must study the past. Here’s a simple way to do this that only takes 15 minutes a day:

Step 1: Create the YTD Winners Scan

You should begin your study by looking for names that are up over 100% YTD. This will immediately narrow down your results to some of the best stocks in the market at any given time. Adding simple price/volume filters afterward will keep the universe of stocks you’re studying more similar to the CANSLIM mold (if that’s your style!).

Step 2: Screen The Results, Make A Watchlist

After you create the screen, the next step is to comb through the results and make a watchlist of all the names you’re going to study into the end of the year. Take this list and put it into your notes so you can cross off/strike through the ones you’ve done and the ones you still have to do.

Step 3: Mark Up 1 Per Day

The next (and most important) step is to commit to marking up one per day. There are 147 days left in the year as of me writing this edition, so by the end of 2023 you can have a chart book of nearly 150 examples of winning charts.

You have the opportunity to collect and study more examples throughout the rest of 2023 than most people study in their careers!

Now, if you’re stuck on what to mark up exactly, here are the guiding questions I’m using:

Questions to answer:

· What stands out about WHEN the stock bottomed?

· What stands out about HOW the stock bottomed?

· What repeatable characteristics are found across the list of stocks you study? Can you make these into an edge for the next bear market bottom?

Using these Qs to guide your analysis will keep your thoughts organized and give you purpose every time you mark up a chart.

Step 4: Collect Markups In A Folder

It’s important to have an organized manner of analysis, but even more important to have an organized method for collecting the charts you’ve marked up. This will allow you to refer to them at any point and can be especially useful when using historical precedents to help you trade current names.

On my computer, I have a ‘Trading’ folder, and then within the master trading folder, I’ve created a 2023 Best Charts repository. Simple, I know, but useful to give the exact steps I take to build a model book.