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> -----Original Message-----
>
> Any Trader's using Will Scmidt's Power ranking software, I'm curious if
his proprietary accumulation distribution indicator, works well?
>
> Mario
>
Schmidt's core indicator is based on a refinement of On Balance Volume.
Daily volume is adjusted by a factor determined by the position of the close
in relation to the range. This concept is not original to Bill.
Strong accumulation is indicated when a moving average of this series is
positive for about six months; the stock is expected to significantly out
perform the market over the next six months to a year. Moves of 50% to 100%
or more are typical. The converse would be true for distribution. I think
Bill originated this concept.
I believe Bill's ranking protocol also includes additional indicators.
Ranking is not timing, it does not predict when a stock will complete its
accumulation/distribution. Market timing tools or trade
breakouts/breakdowns, can be used to initiate trades. If timing is not a
concern, it is generally safe to buy/sell short during
accumulation/distribution based on ranking.
Schmidt's stock rankings have a good track record. You can rely on his
claims; Bill is into what works, he is a meticulous researcher who cares
about credibility and is cautious about creating unrealistic expectations.
He is an educator at heart.
And, yes, he uses his own system. This is an investment program, not a short
term trading system. Day and short term traders will not be interested.
Schmidt has a market timing program which he uses to buy the highest ranked
stocks and sell short the lowest ranked stocks at market turns.
Another approach is to buy the highest and sell short the lowest ranked
stocks simultaneously. Although this reduces returns in uni-directional
markets, it also reduces risk. The highest ranked stocks reliably out
perform the market during advances, and the lowest ranked stocks reliably
under perform the market during declines. Conversely, capital invested in
the highest ranked stocks is conserved during declines because they tend to
out perform the market, and capital is conserved in the lowest ranked stocks
during advances because they tend to under perform the market. (Caution, the
highest momentum 'hot' stocks can be more volatile than the market on the
down side as well.) Profit is generated by the divergence in performance
between the two groups of stocks. No market timing is required.
Hope this information is useful for those more patient investors.
Stan
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