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Okay I'll play this trading discussion and I think its a very good idea.
Here is something to download its free number one and its educational
number two. It's stock screener will show many patterns traders through the
years have noticed and clearly named and followed. It has to many features
to mention here but I use it. I forgot how I found this it might have come
from this list.
http://bigeasyinvestor.com/
Robert
At 07:05 PM 5/16/00 -0400, Bob Fulks wrote:
>At 4:03 PM -0400 5/16/00, Andy wrote:
>
> >here's an idea I've been working on a while:
> >
> >Usually, when prices moves above or below a moving average, most people jump
> >in. What I've always asked, is this move significant enough for me to trade?
> >Is there going to be any follow through or will this move collapse? So, what
> >I've done is create an indicator that measures the difference between a
> >price and its moving average. If this difference is significant enough, I
> >would consider the move significant enough to trade. The question remains to
> >be answer is how do we measure the significance of it? I've always used
> >standard deviations but there are other measures.
>
>
>Good to see a post about trading for a change.
>
>There is a similar idea in Jeff Cooper's "Hit & Run Trading" book. It is
>called "Expansion Pivots" (Chapter 8).
>
>The rules for long entry is (quoting the book):
>
> > Range today is greater than the daily range of the past nine days, and
>
> > Either yesterday or today the stock is trading at or below the 50-day
> moving average and explodes higher.
>
> > Tomorrow, buy 1/8 above the explosion-day high.
>
> > Our initial protective stop is 1 point below the explosion day close.
>
>(There is a lot more detail in the book.)
>
>I would guess a similar effect might occur at the 200 day moving average.
>
>But then if everybody trades it, then it will overshoot so then a system
>that takes advantage of the retrace after the overshoot might be better. <g>
>
>Bob Fulks
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