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Hi Guy,
I hope this doesn't get through twice, as I've been having trouble with
e-mail...
I asked about "channel trading" a couple of weeks ago, because I think
the market may not be comfortable with higher and higher levels, and
thus may tend to range-trade for the latter parts of this year, and
next.
I happened to listen to a Wade Cook tape that they send out for free,
and was intrigued by what I heard about "rolling stocks"....but figured
there must be a more selective way to find stocks that were at or near a
bottom envelope, and for the envelope, I thought a Bollinger band might
be a better choice, since it would not only mark a bottom "barrier", but
would give a predictive price direction at the same time..
Well, Richard Estes was kind enough to provide me with a bottom
bollinger band exploration that turned out to be very selective --
returning over 99% rejections. Unfortunately, the market was so bad at
the time, that most of the broken stocks unlucky enough to "pierce" the
bottom band, simply continued down (with the rest of the market)
Being a relative beginner with MS6.0, I tried shamelessly copying the
John Bollinger "Expert" into an Exploration using the cut/paste (and of
course, using only the "buy" signal portion) and that worked well too,
but due to the market, the stocks usually kept dropping..
I then tried a combination of Wilder RSI <=30 with a Close>200dma, and
Volume X 3, and although not as selective, some of the stocks did
reverse strongly and move higher.....a lot more work, though.
Upon reading your note below, I began wondering about how to write an
exploration that would return only stocks that reversed direction in
Relative Strength -- Not the Wilder kind-- The Investor's Business Daily
kind, where the stock's strength is compared to the S&P 500.
It's easy to do individually by dragging the S&P (or any index) into the
title bar, etc., but the IBD Relative Strength line is really a weighted
moving average of the stocks strength vs. the index.
Probably the strongest of all indicators is the stocks (IBD-type)
relative strength, and if an Exploration could be written that would
find a DIVERGENCE between the relative strength direction, and price
action, it might be a very powerful leading indicator.
Unfortunately, I'm a beginner like you, and this kind of sophistication
in formula creation is beyond my skill..
Maybe someone else has a better idea -- in any case, food for
thought.<g>
Hope I didn't talk your ear off !
Aloha,
Dick Jurgens
Guy Gordon wrote:
>
> On Mon, 05 May 1997 22:00:49 GMT, cbfrish@xxxxxxxxxxxxxxxx (Cliff
> Frish) wrote:
>
> >A lot of discussion regarding "channel trading" has gone on here. How do you
> >define your channels? and how do you use MS to search for trades?
>
> Unfortunately, I missed it because I only subscribed one month ago.
>
> I define a channel as two parallel lines that enclose the price
> movement, touching the intraday highs or lows only at peaks, and are
> parallel to some moving average of the price.
>
> Such channels can be short, medium, or long term. One can trade them
> in many ways. For example, you could buy and hold a stock for as long
> as it traded within an up channel. You could hold KO or ASND for
> years this way. Or, you can buy at the support and sell at the
> resistance line, short at the resistance and cover at the support, or
> both.
>
> As for how to use MS to search for trades, I sure would like to hear
> some ideas.
>
> Right now, I look for up channels by finding strong stocks in IBD
> using their EPS and Rel Str ranks. Then I manually browse through the
> charts trying to spot channels and trendlines. Not very efficient.
>
> Anybody got some ideas on how to automate the process using the
> Explorer?
>
> For example, I could search for stocks that have been above their
> 50-day MA every day for three months. How would you code that?
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