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OK, got my panties pulled out and ready for some good exchange of trading
ideas.
I deal with commodities and futures only, make contract trading selections
based mostly on TA and a smattering of fundamental analysis, and am curious
as to how many of you out there do the same. Yes, MS is a little more
difficult to use for commodities and their revolving contracts, but it
works.
What indicators or price criteria do you use as an initial screen to select
for further investigation?
For my initial screen to decide what deserves further investigation, I
create layouts which consist of two charts. The upper one is the front
contract month of daily data (current volume and open interest is important
here) which tells me what is going on a short term basis. The lower one is
daily historical data in a weekly format which extends back about 5 years.
This tells me the personality of the commodity and where the prices for the
daily data are in relation to recent(?) history. On this lower chart for the
last 5 years, I plot the overall average close and the highest high and
lowest low of the past closes. I then plot 10% bands from these high and
lows to quickly see those contracts which are already at their extremes.
These prices which have been at their extremes for an extended period of
time are usually within a narrow band. To be ready for a breakout, I use ATR
to detect an increase which mostly accompanies a breakout along with a plot
of the slope and ROC (rate of change) of the close.
What do you use for your initial screen?
"Can't we all just get along?"
-Corey.
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