Stock strategy

Hi - I thought I'd start this by describing in some detail my system for trading stocks. There are 4 major parts to any system, and while I am not completely where I would like to be, in the 5 years I've been trading I've come up with a system that makes good money in bull markets (not that impressive), and so far, one that makes a little bit in bear markets/bull market corrections.
The 4 components are:
Setup
Entry
Position Sizing/Money Management (i.e. size of position taken initial and/or increased or profits taken)
Final Exit

Setup:
I run a custom screens daily and weekly, utilizing Reuter's free website setup to screen out companies with "CANSLIM"-like criteria. For those who do not know, I have laid out CANSLIM's acronym below... It was developed by William O'Neil, and he has written books (including "How to Make Money in Stocks") detailing this method, so I will only mention it to say that I do not follow it in its entirety, but it is certainly a wonderful tool to begin your search.
"C"urrent Quarter over Quarter Earnings
"A"nnual Earnings
"N"ew product, new high, etc.
"S"upply, i.e. shares outstanding
"L"eader in its industry
"I"nstitutional sponsorship
"M"arket conditions favorable

Favorable market conditions really should have been first, since none of the other factors matter in poor markets, as 75% of all stocks will follow the market direction... It is possible to still pick winners in difficult markets, but why fight the current?
So, for now, the market's direction has been downward, with a positively ugly week last week. Because of this I am not long any stock, and I am short FNM (I actually own one set of put contracts at 55 due in June, and another set of Jan40 puts - both for Fannie Mae). I am, however, running the screens nightly, and just to reiterate my point above, while my screens are returning some winners, there are many of these leaders getting pounded. Long story short here, when the market conditions are strong, I may have 75-100 stocks on my daily screens, that I sift through looking for an entry point. Today I have 15, and I will not be purchasing anything until I see some market strength. I will post my daily screen in a follow-up thread.

Entry and Position Sizing:
One of the criterion above is that the stock must be within 90% of its 52-wk high, so all stocks making my initial screen have had a positive run at some point. What is important now is to determine the correct entry point, and the only way to do that is to look at charts. I use Stockcharts.com, another free site (has some terrific pay features, but I can get what I need from the free features), to view Weekly (for patterns) and Daily (for exact entry points) candlestick charts. Thanks to the advice of Piranha (Chris Perruna) I have begun to incorporate Point and Figure charts, and they have helped me in my first go through. Oh, and before I forget, check out Chris's terrific website, www.marketstockwatch.com. I will use this forum to develop my P&F chart reading skills... :)
My entry is the initial break out of a base, usually a base lasting at least 6-8 weeks. If it isn't the initial break, but has pulled back, I may still purchase, but I do not like to go beyond the 2nd breakout, as they become more dangerous as they go along. The P&F charts help with SAR, really clarifying these critical price ranges...
I will enter a 25% position at the open after the breakout. This means that I will put 25% (we can call this 1/2 position) of my entire portfolio into a trade, placing an immediate "mental stop" anywhere from 5-8% below my entry (depending on the chart and stock volatility). Doing the math, this means that I can only lose 2% of my portfolio max on any trade (.25*.08=.02), and I am perfectly fine with that.
If the stock moves up 2-3% in the first week, and the market conditions stay positive, I will add another 1/4 position (or 12.5%), and then I will add the final 1/4 position to take me to full position once it has moved upward 7.5%.

Exit and Position Sizing:
Okay - assuming I now have a full position, there are many things that will take me out of a trade. First, a confirmed market correction and/or bear market tightens up everything, as companies with huge run-up begin falling left and right (see TZOO and TASR). I put tight stops in on everything that I own, and usually try to get out of stocks prior to their earnings announcements (just too unpredictable).
In continuing bull markets, I give the stock more room to breathe, and will establish a price target upon purchase. This is usually in the 20% range, but could be higher or lower based mostly on chart patterns (and of course, changing market conditions). Once this price target is hit, I will sell 1/2 the position, and put a trailing stop in for the remaining 1/2 position. Once this trailing stop is hit, I am out of the position.

So that's it on the long side... I will follow up with the stocks that are on my daily screen today, along with a small explanation surrounding how I'm learning the short side...
Take care - Dante