How to use the mPower: Algorithm Sheet

The rationale behind the proprietary algorithm of mPower

Using powerful proprietary algorithms, our four strategies identifies low-risk high probability level to enter a stock or instrument (used interchangeably) in the direction of the trend or when counter-trend opportunities are available. These strategies are classified in accordance with the risk level of the trader. The outline of each strategies are further explained below:

Swing Strategy (Type 1) for Aggressive Traders

This strategy incorporates the use of swing and trend analysis for short-term low-risk high probability trades.

Breakout Strategy (Type 2) for Aggressive Traders

This strategy incorporates the use of price breakout analysis for short term low-risk high probability trades.

Reversal Strategy for Moderate Traders

This strategy incorporates the use of price reversal analysis for medium-term low-risk high probability trades.

Trend and Cycle Strategy for Conservative Traders

Using powerful proprietary algorithms, our flagship Trend and Cycle strategy identifies a stock that is firmly trending up and within that firm uptrend, it identifies areas of cycles low for longer-term low-risk high probability entries for a buyer to continue to ride the uptrend. The algorithm also builds in very powerful risk-reward calculations that incorporates various factors such as volatility, velocity, pattern and etc. to filter stock picks that are designed to fulfill the following four factors:

  1. the stock is likely to rally up further (with an 80%-100% accuracy probability)
  2. with reasonable upside performance (at likely least more than 5% to 10%-20% and/or more),
  3. within the shortest time possible (expected to rally within the day the recommendation is made or 1-2 days thereafter if the trigger level is triggered)
  4. with the lowest risk possible (at cycle lows within a firm uptrend)

Calls are only valid IF the price moves above the trigger price stated. Only stocks that fulfilled ALL of the factors above will be picked by our algorithm. The algorithm utilises extensive software and server resources and are designed to filter a large amount of data and information using proprietary mathematical, quantitative and statistical techniques. It is estimated that million of data points are processed and analysed daily and intra-day, which without the technologies involved, would take months to process. Final selections undergo a complex filtering of risk-reward assessment and hence only select RISK-ADJUSTED instruments can pass through the final process. We are not only interested in high probabilities trade but only in low-risk high probabilities trades. Any trading system which fails to take into account risk is not worth its salt. Stop loss level are then further given to protect the trades and safeguard the overall trading portfolio. The complex results are simplified into a daily report of usable information for traders and investors, which belie the extensive computing, processing and human work that goes behind to create the report. Investors should diversifiy their selections of the picks presented in a trading portfolio for the best results. The exact composition of the selection algorithm and risk-adjusted system is the proprietary asset of Bulls & Bears Trading Education.


IF YOU ARE A TRADING SHEET (TS) SHEET USER

Entering the Position

How to enter your position

For the Swing, Breakout and Cycle and Trend Strategies, enter at the next immediate 2 bids once the price moves above the trigger price stated. For the Reversal Strategy, there is no trigger price required and entry could be made at the opening price of the trading day (provided there is no huge gap-up or gap-down in prices).

You should always diversify your portfolio on the calls identified and more weightage should be given to stocks which are fundamentally sound and have analysts’ coverage (esp. if the stock price is below the analysts’ fair value price).

Please read and understand at the minimum the explanations for the respective strategy columns in the “Legend” sub sheet before you decide to enter any positions.

Exiting the Position

  1. If you made a lost entering the position. 
    • Exit the position immediately if the stop loss stated in the respective columns are hit accordingly depending on your own time frame of trading (short or long term)
  2. If you made a profit entering the position
    • The rules of taking profit (unlike a cut loss) are not cast in stone although we do recommend investors to take their profit if they can make 5%-10% or more in short period of time (say within a few days period) regardless of the several other guidances listed below.
    • Alternatively, one could hold the stock until the trailing stop loss are hit accordingly.
    • That said, one could technically hold a stock as long as it remains in an uptrend but the risk could increase that the profit could be lost or diminished substantially if the trend or momentum abruptly turned. As such, whichever strategy you choose to take your profit, you should adopt a habit of taking profits (whether all or partially or gradually) as a trader while keeping your stop loss tight.

IF YOU ARE A MODEL PORTFOLIO (MP) SHEET USER

Entering And Exiting The Position

Unlike the TS strategy which is suited more for short-term traders, the MP sheet is more suitable for long-term traders looking to ride the main trend of a stock, rather than its momentum which may flow and ebb from time to time.

How to enter your position:

At the first instance that you see a stock turned into a Bull Model Portfolio stock, we suggest that you wait for a cycle retracement first at the low before entering a buy (vice versa for sell position). This means that you should wait until the cycle level at column 16A3 to be below 50 or better, oversold before entering. The converse should occur if you are entering into a Bear Model Portfolio Stock (for short position)

You should always diversify your portfolio on the calls identified and more weightage should be given to stocks which are fundamentally sound and have analysts’ coverage (esp. if the stock price is below the analysts’ fair value price).

Conservative investors may prefer to pick Model Portfolio stocks rated A-C instead of those rated D-E(2).

How to exit your position:

Exit as soon as a stock is declassified as a Model Portfolio stock (and/or your stop loss is hit in Column 37 ot at a maximum Column 38).