Registered User
Joined: 12/8/2004
Posts: 1,301
|
The orange lines are 3,5,8,10,12, and 15 day exponential moving averages.
The red lines are 30,35,40,45,50, and 60 day exponential moving averages.
When the orange lines group and fall almost into one line you have a decision point at to whether or not to buy the stock.
As long as the red lines are moving up the decision is easy. Buy the stock. These are the intermediate term moving averages.
Always buy or short in the direction of the intermediate term. If the red lines are above the orange lines DO NOT BUY THE STOCK!
Never worry when the stock price moves into the red lines. Only worry when the orange lines go below the red lines.
If you can find a stock where the red lines are moving up and the orange lines are moving up, but they are all very close together you probably have a huge winner. A current example of what I am talking about is TRMM. So Apsll, it looks like you have a high probability with this stock pick.
This method is very effective, but it gets even more effective if you play around with possible exit strategies. I still use this as one of my systems to this day. Do not use this if you see a stock in a constant trading range because you will get burned. Use this at the beginning or end of trends in either direction.
|
|
Registered User
Joined: 1/7/2007
Posts: 45
|
Thanks HaveNoCents
|
|
Registered User
Joined: 12/8/2004
Posts: 1,301
|
I forgot to mention stops. If we enter at decision point A we should set our stops slightly below whatever the lowest low was of the previous three days. You then move up your stops to below the lowest low of the next decision point after the stock has clearly moved beyond that point.
|
|
Registered User
Joined: 3/21/2006
Posts: 4,308
|
HNC: Just a question if I may, I am assuming that this method is not meant to help with a bounce coming off of a bottom (any price, high or low).
Example: GV on 12/11/06
Because, clearly the red lines are above the orange lines at the Decision point.
Example: EYE Decision point 1/10/07 same thing the red lines are above the orange lines.
Would I be wrong to assume that this method is best used on uptrending or momentum type stocks?
By the way I do like what you have here, I have made a new template and called it "HNC" In the middle window I have Stochastics 9,3,6 And in the bottom window I have MACD 8,21,10 (I know unconventional settings, but it works for me)
Thanks for sharing...
|
|
Registered User
Joined: 12/8/2004
Posts: 1,301
|
When I said that you never buy when the orange is below the red it was for newbie reason. The probability is just higher when you are going in the direction of the intermediate term trend. This system works well regardless of the intermediate term IF you develop a proper exit system to make sure you are on the right side of the trade. A parabolic sar system will still yield you good profits. So will an rsi system where you take on the stock and say I will hold short term as long as rsi is rising. I'm sure other indicators will work as well.
GV is actually a great example. This is a total judgment call. Just about all stocks rising off a bottom will make an upward move and then pull back. You could still enter the stock once all short term moving averages rose above the intermediate term moving averages. That would have happened about 12/19. You just have to be more careful in this area because the first pullback may take all of your profits.
I hoped that answered your question, and I am honored to be in your templates.
|
|
Registered User
Joined: 12/8/2004
Posts: 1,301
|
I should also mention then when backtested this type of system yields better than 3% better profits when you trade in direction of the intermediate term trend.
|
|
Registered User
Joined: 3/21/2006
Posts: 4,308
|
Thank you for your help in this matter HNC...
|
|
Registered User
Joined: 12/8/2004
Posts: 1,301
|
No problem. If anything this system will at least confirm a proper entry point. I base all of my swing trade entry points on the short term lines. If they are not close together I do not buy.
|
|
Registered User
Joined: 10/7/2004
Posts: 2,181
|
Nice HNC, very nice.
|
|
Registered User
Joined: 9/22/2005
Posts: 849
|
I, like many others I expect. immediately did as apsll and made a new template named HaveNoCents. I had questions similar to those of aspll which you have answered so admirably. You are to be commended for your efforts to inprove the knowledge of we newbies.
Now we need some one to help in developing a scan for candidates for consideration which does not result in a list with one hundred forty three members.
|
|
Registered User
Joined: 12/8/2004
Posts: 1,301
|
I've never had the scan problem because I just trade about 100 stocks. I just scan them manually.
You could do the following that will get you close:
XAVGC3 >= .995 * XAVGC5 AND XAVGC3 <= 1.005 * XAVGC5 AND XAVGC3 >= .995 * XAVGC8 AND XAVGC3 <= 1.005 * XAVGC8 AND XAVGC3 >= .995 * XAVGC10 AND XAVGC3 <= 1.005 * XAVGC10 AND XAVGC3 >= .995 * XAVGC12 AND XAVGC3 <= 1.005 * XAVGC12 AND XAVGC3 >= .995 * XAVGC15 AND XAVGC3 <= 1.005 * XAVGC15
now if you look closely at the formula you will see .995 and 1.005. Basically you are saying that you want the moving averages to be within 1/2 of one percent of each other.
Unless someone can think of a better way to do this you will probably have to set up the scans by price range of the stock. 1/2 of 1 percent is too high on a 90 dollar stock and 1 percent may be too low on a 3.00 stock.
|
|
Registered User
Joined: 12/8/2004
Posts: 1,301
|
if you just want to long for potential long candidates you can add
and xavgc3>xvagc60
If you just want to just look for shorts add
and xavgc3<xvagc30
I would also add a volume lime on the scan.
|
|
Registered User
Joined: 12/8/2004
Posts: 1,301
|
lol I'm watching tv and posting
look for longs not long for longs
volume limit not volume lime
sorry
|
|
Registered User
Joined: 1/28/2005
Posts: 6,049
|
This is another idea to try:
((ABS(XAVGC3-XAVGC8)+ABS(XAVGC5-XAVGC8)+ABS(XAVGC10-XAVGC8)+ABS(XAVGC12-XAVGC8)+ABS(XAVGC15-XAVGC8))/XAVGC8)*100
This calls 8 the "middle" moving average and sums the absolute
difference between it and the other moving averages. The sum
is divided by the 8 moving average and multiplied by 100.
(to normalize for different priced stocks)
Low values will be where moving averages are
close together.
You can either use this in an easyscan or plot it in
1 of your windows. the 'decision points" are when this
bottoms. (As the stock moves you can see the expansion
and it may be possible to use this for short-term timing)
In your plot window you can call up a watchlist of trade
candidates. Click on the indicator line and choose:
"sort by actual value". It will sort your watchlist for you
according to moving average expansion.
Thanks
diceman
|
|
Registered User
Joined: 10/7/2004
Posts: 2,181
|
Yeah, Diceman, that's just what I was about to say....
|
|
Registered User
Joined: 1/28/2005
Posts: 6,049
|
One last point. Realize that because this is an
absolute difference. (always positive)
It will move up if the stock goes up or down.
All low values mean is the moving averages are
close. ( when high they are separated )
Thanks
diceman
|
|
Registered User
Joined: 12/8/2004
Posts: 1,301
|
Nice job. I just tested it and it works great.
|
|
Registered User
Joined: 1/7/2007
Posts: 45
|
Hi All
This thread is great, I'm learning so much and to think I didn't want to post and sound dumb. Newbie here but a sponge here want to learn all I can from all didn't views.
Thanks all,,,,,,,,,I have been in the video room all night, now I'm trying to catch up on all the post.
Ya'll are the best.
HaveNoCents thanks again for starting this thread
|
|
Registered User
Joined: 1/7/2007
Posts: 45
|
OK HNC look at SWW is this what you are looking for? Would you buy.......if not Why, Thanks again for all your help.
My chart isn't as pretty as your LOL
|
|
Registered User
Joined: 12/8/2004
Posts: 1,301
|
In general SWW fits the bill, but raises some questions. Its price range has been so small for so long it looks like a company that has been purchased for specific price. Check the news to make sure that hasn't happened. Look at the news from october till the present because it had a big jump in early october and has practically done nothing since.
If it has not been sold the narrow range for 4 months either suggests a coiled spring about to rise or a stock with so little interest it will eventually fall from its own weight. The stock has no volume whatsoever so personally I would stay away from the stock, but the appearance on the chart is what you are looking for.
Always read the news on a stock, AND know when it will report earnings BEFORE you purchase. Try to make sure you never purchase a stock a week or two before earnings unless your plan is to get out of the stock before then.
|
|
Registered User
Joined: 3/8/2005
Posts: 8
|
HAVE NO CENTS WILL U GIVE SOME OTHER LEASONS ALSO PLEASE
|
|
Registered User
Joined: 3/8/2005
Posts: 8
|
LESSONS LOL
|
|
Registered User
Joined: 12/8/2004
Posts: 1,301
|
I do want to add if you want to increase your odds of success look at the trend of the sector your potential stock is in. This is a tc2007 strong point and you should always use it. If the sector trend is down and not near a decision point, do not buy the stock. Always stay in tune with the overall market, and the sector.
Dennis I don't have that much to offer. My goal is to get people to think. This system is not my system although I have used something very similar for more than 10 years. It's a stand alone trend following system, or an entry confirmation system for other methodologies. Everyone on this board has the ability to come up with short and long term systems. The great systems are not shared by anyone until they no longer work. We are all on our own.
This system will give you good returns. If you convert it to swing trading you can make a lot more. When a market is trending entry is not as critical as exit strategy. When a market is not trending entry and exit are critical.
People need to develop exit strategies depending on their investment style.
|
|
Registered User
Joined: 12/31/2004
Posts: 382
|
I thank you very much for shareing this ..I paper trade this using GTOP.I found this one and said his one looks good to me.today it was doing ok it work the frist paper trade. I had my stops in .I hope you kept on sharing yout thoughts.On the 3avg and the 15avg I use a diffent color.that way when they come togerther I can see wich one is on top and bottom.HNC,thank you very much .oh its great on real time too ,In fact very colorfull too.
|
|
Registered User
Joined: 12/31/2004
Posts: 382
|
I thank you very much for shareing this ..I paper trade this using GTOP.I found this one and said his one looks good to me.today it was doing ok it work the frist paper trade. I had my stops in .I hope you kept on sharing yout thoughts.On the 3avg and the 15avg I use a diffent color.that way when they come togerther I can see wich one is on top and bottom.HNC,thank you very much .oh its great on real time too ,In fact very colorfull too.
|
|
Registered User
Joined: 12/8/2004
Posts: 1,301
|
I'm going to do one more thread on swing trading and then I will be done as I have to attend to my own trading. I have guests coming in today for the weekend, but I will try to the swing trading thread after lunch if possible. I will subscribe to the threads so I can answer any questions, but I am sure there are others who can answer questions as well. Remember though, these are basics. You must adapt everything to your style and risk tolerance.
|
|
Registered User
Joined: 9/22/2005
Posts: 849
|
Thanks, Diceman and HavenoCents.
I have tried both of your ideas for a scan. I like Diceman's better because it is easier to modify while testing.
QUOTE (diceman) This is another idea to try:
((ABS(XAVGC3-XAVGC8)+ABS(XAVGC5-XAVGC8)+ABS(XAVGC10-XAVGC8)+ABS(XAVGC12-XAVGC8)+ABS(XAVGC15-XAVGC8))/XAVGC8)*100
I put this into a pcf and set it to less than 0.75 and it resulted in seven stocks to be considered.
|
|
Registered User
Joined: 1/28/2005
Posts: 6,049
|
I would also add. the methods described above can be used to
spot longer-term trends.
If multi-day or weekly charts are used.
(My guess is the lengths of the moving averages would be shorter
if you wanted to use monthly charts)
Realize that if you use my scan for that. You would have to use
the "sort by actual value method"
The PCF is in days but if plotted, it will adjust to the time-frame
displayed on the chart.
Thanks
diceman
|
|
Registered User
Joined: 1/7/2007
Posts: 45
|
OK newbie here.
I think I did it right.
Copied the formula, Made new PCF and named it Diceman, Then started new Easy Scan and the only item I put in there was Diceman and then down to 75% and came up with only 6 so I think I did it right.
Here is the problem......WhAT did it pull??????? I have no lines like I did with HaveNocents so don't know where would be a great time to buy.
Help please
|
|
Registered User
Joined: 1/7/2007
Posts: 45
|
QUOTE (HaveNoCents) <img src=" http://clalloys.com/hpqmma.jpg"/>The orange lines are 3,5,8,10,12, and 15 day exponential moving averages. The red lines are 30,35,40,45,50, and 60 day exponential moving averages.
On the chart I put what HavenoCents suggested and it worked well I could see when would be great times to gets in. How would a write a PFC for that or can you?
Thanks in advance
|
|
Registered User
Joined: 1/28/2005
Posts: 6,049
|
Did you read the comments by HNC, bcraig73450,
and myself, as they relate to scans?
Thanks
diceman
|
|
 Gold Customer
Joined: 9/18/2006
Posts: 83
|
I would like to thank you for your last two topics. They were very informative and gave me some new, usable information. I have a question regarding the chart. I am unable to duplicate the moving average lines in red. Mine are spread apart much farther than yours. I used the same EMA's and I'm on the daily chart with the last week of August showing on the left. I think there is a scaling issue that I don't know about or understand. Any thoughts would be appreciated. Thanks.
|
|
Registered User
Joined: 1/7/2007
Posts: 45
|
Yes I did but when I viewed the charts after running the scans there are no lines to show me the moving avages, so I wasn't sure if I did the pcf right.
Did yours have the trends lines if so I did do something wrong.
|
|
Registered User
Joined: 1/28/2005
Posts: 6,049
|
Make sure your moving averages are of the close
and not of each other.
Also make sure they are exp. moving averages.
Thanks
diceman
|
|
Registered User
Joined: 1/28/2005
Posts: 6,049
|
Cowgirl1964
You add the moving averages.
They are not part of the PCF.
(or trendlines)
Thanks
diceman
|
|
Registered User
Joined: 1/7/2007
Posts: 45
|
QUOTE (diceman) This is another idea to try:
((ABS(XAVGC3-XAVGC8)+ABS(XAVGC5-XAVGC8)+ABS(XAVGC10-XAVGC8)+ABS(XAVGC12-XAVGC8)+ABS(XAVGC15-XAVGC8))/XAVGC8)*100
OK when I make a new pcf using this what is it pulling?
I thought it was pullings stocks & MA's lines for 3, 5, 10, 12, & 15
|
|
Registered User
Joined: 1/28/2005
Posts: 6,049
|
Cowgirl1964
It is measuring the distance between the moving averages.
Notice on HNC chart when there is a decision point
they are close together.
(only the 3,5,8,10,12,15)
So if you run the scan and look for low values.
It should give you stocks that are at or near
decision points.
The moving averages are placed on the chart by you.
(as indicators)
It is up to the user if the stock is at a decision point
but it will eliminate the ones that are not.
(notice in-between decision points the moving averages
are spread apart)
Once you have candidates (low values) you will then
look at the charts to see if they look good.
You can also plot this value as an indicator using
a custom indicator and sort by it.
You may be interested in this:
Adding, removing and saving indicators to a chart template
Plotting Custom Indicators with Examples
Create your own stock rankings using WatchLists and Sort conditions
Sorting price and indicators by their Actual Value
Thanks
diceman
|
|
Gold Customer
Joined: 9/18/2006
Posts: 83
|
Thanks, diceman. I've got it now.
|
|
Registered User
Joined: 9/21/2005
Posts: 566
|
Diceman, have you backtested this with backscanner?
|
|
Registered User
Joined: 1/28/2005
Posts: 6,049
|
jcfla7
I haven't tested what is shown here but I have tested this as a
basic "trend following system" and found it superior to
"standard" moving averages systems.
A stock is considered in a positive trend when the lowest
of the fast moving averages ( 3,5,8,10,12,15) is above the
highest of the slow moving averages (30,35,40,45,50,60).
(talking about lowest and highest vertically on the chart)
Thanks
diceman
|
|
|
Guest-1 |