Below are examples of equities’ trading strategies: the first is designed to select stocks that are less expensive than the overall market, the second is for selecting companies whose earnings are accelerating, and the third is to trade stocks that are currently in high demand:

Stocks:
The best way to pick stocks is to follow a screen based on fundamental criteria and overlay it with some technical indicators. This will give the investor the confidence that the portfolio contains fundamentally sound and profitable companies. The technical overlay serves to weed out companies that are currently undesirable for one reason or another.

1. Relative Value
   1. The Relative Value screen looks for companies that are profitable and selling at more attractive valuations than the overall market. As mentioned earlier, this could be due to sector rotation, seasonality, or simply an extended period of profit taking. An example of such a screen:
      1. Market Cap. > 2.0 Billion
      2. P.E. > 0 and < Market average P.E.
      3. Dividend Yield > Market Average Dividend Yield
      4. R.O.E. > Market Average R.O.E.
      5. Price > 50 day moving average of the closing price
2. Growth:
   1. The Growth screen focuses on the growth in sales and earnings per share instead of valuation. It seeks companies that are undergoing an acceleration in profitability. Typically the share price will follow the growth in earnings, however, such stocks tend to be more volatile. An example :
      1. E.P.S. growth current quarter > 25%
      2. E.P.S current quarter> EPS previous quarter
      3. E.P.S. current year > EPS previous year
      4. Sales growth current year> sales growth last year
      5. R.O.E. > 20% but < 60%
      6. Price > 50 day moving average
3. Momentum:
   1. Momentum is the most volatile of the strategies but is often pursued because it generates portfolio that contain the current best performers. The screen picks the stocks that had the best performance so far and expects that performance to continue for a while. Of course, no stock will outperform forever, therefore strict risk management rules must be applied:
   2. Price change last year top 20%
   3. Price change current year top 20%
   4. Price change this quarter top 20%