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I was wondering if there was a way to make a statistical guess as to weather
or not a trading range is being entered. A few ideas:
1 Number of touches and/or closes around the MA per unit of time.
2 slope of say 5 days of MA compared to say 20 days, or compared to slope of
another MA.
3 %range of Bollinger Bands today compared to x day avg. ; tightening of the
bands implying a lessening of movement and increased chance of a trading
range. This along with #1 would gaurantee a few losing whipsaw trades, but
then get you flat until a new trend could be enered. Accepting losing trades
before hand is the key.
4 % above 200 and 50 day MA's; the higher the %, the greater the chance of
entering a downtrend correction.
5 The general trend of the group or sector a stock is in. When OSX, the oil
services index was in an uptrend, most of the stocks were in sync. When it
corrected recently, it made a predictable bounce at a Fib support, retraced
to just under the 50 dMA, then headed back down.
6 Using some discretion. If you get a buy signal, but the buy price is close
to the botom of a gap or the 50dMA, I would be looking to short under normal
circumstances.
Is anyone using an adaptive MA? If so, what kind? I made one using volume as
a variable, but would like to add other components.
IBM has been a nice trending stock this year. I am looking for a retracement,
then a place to enter a short once again. It got stalled at the top of the
gap yesterday.
Thaks for any comments.
RayF
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