The Cole Method For Trading Stocks by Alan Friedman
Is there a code that is used by insiders to alert each other as to which stock will move and to what price? As far-fetched as it seems, the late Roger Cole discovered such a code in the earlier part of this century that he used to profit in the stock market. Over the years, Cole handed down this method to traders, including one who now writes a newsletter based on this method. I found that the method has promise. For example, last August the method produced an up signal projection in
American Airlines (AMR) to 102-107. On October 5, after Donald Trump offered $120 a share for AMR, the stock hit a high of 107 1/4.
Even with the success of the AMR trade, I could see some flaws in the basic method. There was no timing indicator, for example. Sometimes I was stuck with a dead-in-the-water trade for more than a year. There were also too many losing trades and no stop-losses. The results were decidedly uneven, and so I dedicated myself to turning Cole's method into a mechanical system that would generate fast short-term profits. Beginning with real-time trading in April 1990, the method has produced a return of 26.1% in a cash account, including a $1 per share charge for commissions and slippage.