TheRumpledOne
6,411 posts
msg #41599
- Ignore TheRumpledOne |
2/27/2006 7:37:32 AM
Got the idea from SFO March 2009 Page 82.
If both ATR and Bollinger Band are decreasing then volatility is decreasing... prelude to breakout.
MAY ALL YOUR FILLS BE COMPLETE.
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alf44
2,025 posts
msg #41604
- Ignore alf44 |
2/27/2006 10:56:37 AM
I like it...in theory !
Range Contraction !
Howz about adding some criteria to find NR4s or NR7s or BOTH ?
Regards,
alf44
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alf44
2,025 posts
msg #41606
- Ignore alf44 |
2/27/2006 1:05:37 PM
"If both ATR and Bollinger Band are decreasing then volatility is decreasing... prelude to breakout."
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The thing to keep in mind though is that the "breakout" can be in EITHER direction. imo
Here is the filter with an NR7 condition added...and also the Price criteria is upped to screen for stocks ABOVE $10 ! This is necessary if you are looking for stocks to play LONG or SHORT...depending on the direction of the "breakout" !
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Regards,
alf44
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TheRumpledOne
6,411 posts
msg #41611
- Ignore TheRumpledOne |
2/27/2006 7:02:08 PM
"The thing to keep in mind though is that the "breakout" can be in EITHER direction."
That's the point!
This filter gives you a "heads up - breakout on the horizon" signal.
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alf44
2,025 posts
msg #41616
- Ignore alf44
modified |
2/27/2006 11:57:39 PM
TRO,
I just wanted to reinforce the point that...in the context of a "Range Contraction" period...aka...a period of diminishing volatility...as witnessed by...shrinking "Average ATR values or Bollie Bands"...OR..."Narrow Range Days" (ie. NR4s, NR7s, Inside Days etc...)
---> you MUST be prepared to "play the breakout" EITHER WAY...LONG or SHORT !!!
Often, people think "breakout" (the term YOU used in your original post) as meaning a "breakout to the UPSIDE" !
That AIN'T necessarily so !
Good chart reading skills can definitely give you a trading bias...BUT...during these periods of Range Contraction...the moves can definitely go EITHER WAY !
So...like a Boy Scout...Be Prepared !!!
And don't be afraid to go with the price movement...UP or DOWN !!!
All in my opinion of course !
Regards,
alf44
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