Position Traders focus on capturing gains from price movements that occur over a timeframe of many months to years.

Unlike long-term investors who buy and hold with a predetermined holding time, Position Traders actively monitor market conditions and change their decisions to adapt to market trends.

Position Trader Screeners demand a strong conviction in a stock's long-term growth trajectory as trades will be held through multiple earnings cycles and basing formations.

Accumulating shares to form large positions requires focusing on stocks with significant institutional sponsorship. Basic liquidity criteria should be used in conjunction with all of your screens.

Adding the above liquidity criteria to your screens will ensure you are focused on stocks with large institutional interest while allowing you to enter and exit trades without affecting the stock's price movement.

Remember, Position Trading involves holding stocks through normal market corrections while focusing on stocks with leadership characteristics.

This blog will help you dive deeper into specific strategies for identifying and capitalizing on stocks with future growth potential.

CANSLIM Preset

The acronym CANSLIM, developed by William O'Neil, is an investing approach to identifying stocks with high growth potential. This methodology is widely used by Position Traders who look for stocks with sound fundamentals and revolutionary products.

Consider the CANSLIM methodology when screening for stocks showing relative strength that are near highs and exhibit positive earnings and sales.

This Screener Preset includes the basics of CANSLIM investing. Restricting your screeners to have every CANSLIM characteristic will show fewer results

52 Week New High

Leading stocks outperform the market and continuously make new highs. Routinely screen the New 52 Week High list when searching for the strongest stocks to Swing Trade.

Stocks that make new highs will continue to make new highs.

Add a strong Daily Closing Range (DCR) to ensure the new high followed through with strength.

Relative Strength Line New High

The Relative Strength (RS) Line is a simple indicator that measures a stock's performance compared to the overall market. The RS Line, and number value, can help identify stocks that are outperforming the market.

Stocks that have RS Lines making new highs are outperforming the market. Change the timeframe for your personal trading style.

You can also look for stocks whose RS Lines make New Highs Before Price (RSNHBP). In down-trending markets, stocks that show relative strength might be consolidating sideways while the RS Line advances.

Earnings Per Share

Earnings Per Share, the amount of net profit allocated to each outstanding share of stock, is tracked closely by large institutions to ensure the company is expected to continue its growth. Leading stocks continuously report positive earnings that are increasing quarter over quarter and year over year.

The top-performing stocks report 30% earnings growth quarter over quarter, ideally over the past three quarters. Pay close attention to stocks that report triple-digit earnings.

Also, be sure to look for positive earnings year over year. Position Traders with a holding time horizon of months to years should insist on stocks well positioned for long-term growth.

Sales

Sales refer to a company's total profit before expenses. Like Earnings, Sales are tracked closely by large institutions to ensure the company is expected to continue its growth quarter over quarter.

The top-performing stocks report 25% sales growth quarter over quarter, ideally over the past three quarters. Pay close attention to stocks that report triple-digit sales.

Sales drive profitability. Keep stocks on your radar that report their first quarter of positive sales after a long period of losses.

Forward Estimates

Looking ahead at Future Estimates and revisions will point you toward stocks well-positioned for sustained future growth. When research analysts interpret quarterly guidance, they try to predict future moves.

The market is forward-looking. Research analysts upgrade stocks with significant forward estimates as they see potential for future growth.

Like tracking quarterly reported earnings, screen for stocks with the potential for significant gains based on analysts' estimates.

Three Weeks Tight

When your holding time horizon is into the next year, look at weekly charts to help clear any volatile action seen in a daily chart. Position Traders utilize weekly charts to find clear areas of support and resistance in a longer timeframe.

Tight Weekly Closes are a sign of large institutional support for the stock in this price area.

Look for tight weekly closes while a base is forming to uncover supportive price action before a large advance. After a stock's price advances, tight weekly closes can also reveal a lack of distribution.

Near Highs

Knowing that leading stocks continue to make new highs, stocks near highs should be monitored closely. As the market progresses through its natural corrective phases, the best stocks will stay near their previous highs, while weaker stocks will begin to decline sharply.

A traditional basing formation will see the stock stay within 25%-35% of its previous high.

Base depth will change depending on the market environment, but the strongest stocks will show relative strength by staying near highs.

Stan Weinstein Stage 2 Preset

Stan Weinstein is best known for his book “Secrets For Profiting In Bull And Bear Markets.” Stan Weinstein's Stage Analysis outlines the natural progression of a stock's price cycle.

Stocks in Stage 2 have finalized their Stage 1 bottoming process and are advancing higher in price.

Model book stocks that see huge increases are rising during their Stage 2 advance.

Jim Roppel 20/20 Preset

Hedge fund manager Jim Roppel worked closely with William O'Neil and continues to invest using the traditional CANSLIM methodology.

When holding stocks through multiple earnings cycles, Position Traders should prioritize companies continuously reporting positive earnings and sales.

Add This Screener to Your Deepvue Account: Link

This Screener Preset utilizes the “OR” function to narrow down to a specific type of stock with strong fundamentals.

Putting It Together

Position Trading focuses on large price movements as stocks continue to grow by showing positive fundamentals while making new highs. Build conviction in the stocks you screen for to capitalize on strong price trends supported by institutional accumulation.

Focus on high liquidity to identify stocks backed by big institutions. High trading volume allows you to enter and exit large positions without affecting the day-to-day price movements.

Look for strong earnings and sales when you are screening for stocks.

Keep Relative Strength at the forefront of your search to concentrate on stocks outperforming the market.

Concentrate on stocks showing leadership qualities to withstand normal short-term market corrections while developing confidence in the longer-term hold.