| StockFetcher Forums · Filter Exchange · uptrend pullback trend | << 1 2 3 >>Post Follow-up |
| TheRumpledOne 6,411 posts msg #38408 - Ignore TheRumpledOne |
10/11/2005 4:10:25 PM I went to the site... Counter Trend Set-up Counter Trend set-up for long and short trades. Where many traders look for break-outs and break-downs to signal a trade, some of the highest probability trade set-ups can actually be found on the counter trend move. Ideally we want to buy a strong stock during a pullback and sell a weak stock during a rally. That is what this set-up helps us to identify. This trade set-up can be used for both long trades and short trades. Counter Trend Set-up for Short Trades This set-up is to be used when the overall market or major market sector is in a down-trend. For a short trade we are looking for stocks that are weaker than the market, are in a confirmed down-trend and have rallied for at least three day's on lower volume. Preferably, we want to identify stocks that are rallying up to their 20-day exponential moving average (EMA). The 20-day EMA is often a point of resistance for minor counter trend rallies. Once we have identified a candidate we wait for a close below the previous day's low as our signal to enter a short position. For short-term traders a trailing stop should be considered. I prefer to place a stop on a close above either previous day's high or the high two days ago. Use stocks whose price is over $10 per share, with 30-day average volume greater than 50,000. Find a stock whose 20-day Rate of Change (ROC) is less than the 20-day ROC of the Russell 3000. Whose ADX (14) > 20 and (-DMI > +DMI) Close < Close 20 days ago Close < 20-day exponential moving average (EMA) Close > (20-day EMA - .10*20-day EMA) - Looking for a stock that is near its 20-day exponential average. Today's Low > the Low 3-days ago The 3-day moving average of Volume is less than the 3-day moving average of volume 3-days ago. AND On Balance Volume < its 30-day EMA StockFetcher screen (click to view results): fetcher[ /* counter trend short set-up */ show stocks where price is above $10.00 and average volume(30) is above 50,000 and ROC(20) is below Ind(^RUA,ROC(20)) and ADX(14) is above 20 and -DI is above +DI and close is below close 20 days ago and close is below EMA(20) and close divided by EMA(20) is above 0.90 and low is above the low 3 days ago and average volume(3) is below average volume(3) 3 days ago and OBV(30) is below Average OBV(30) ] Counter Trend Set-up for Long Trades This set-up is to be used when the overall market or major market sector is in an up-trend. For a long trade entry we look for stocks that are outperforming the market, are in a confirmed up-trend and have declined over the past three days on lower volume. We like to see stocks decline to near their 20-day exponential moving average (EMA). The 20-day EMA is often a point of support during minor pull backs. Once we have identified a candidate we buy when the close is greater than the previous days close. For short-term traders a trailing stop should be considered. I prefer to place a stop on a close below either previous day's low or the low two days ago. Find a stock whose 20-day Rate of Change (ROC) is greater than the 20-day ROC of the Russell 3000. Whose ADX (14) > 20 and (+DMI > -DMI) Close > Close 20 days ago Close > 20-day exponential moving average (EMA) Close < (20-day EMA + .10*20-day EMA) - Looking for a stock that is near its 20-day exponential average. Today's Low < the Low 3-days ago The 3-day moving average of Volume is less than the 3-day moving average of volume 3-days ago. AND On Balance Volume > its 30-day EMA StockFetcher screen (click to view results): fetcher[ /* counter trend long set-up */ show stocks where price is above $10.00 and average volume(30) is above 50,000 and ROC(20) is above Ind(^RUA,ROC(20)) and ADX(14) is above 20 and +DI is above -DI and close is above close 20 days ago and close is above EMA(20) and close divided by EMA(20) is between 1.10 and 0.90 and low is below the low 3 days ago and average volume(3) is below average volume(3) 3 days ago and OBV(30) is above Average OBV(30) ] Note: this set-up is an excellent illustration of the versatility and quality of the StockFetcher software. =================== For some reason, can't seem to make the filter clickable. |
| TheRumpledOne 6,411 posts msg #38409 - Ignore TheRumpledOne |
10/11/2005 4:11:09 PM Inside-day Volatility Set-up Put simply, I look for a stock where the range (high-low) is the lowest value of the last 7 days and the stock is an inside day. Also, the stock needs to be trending, in this case the ADX value is above 20. What makes this set-up different from a simple inside day is the volatility component. By identifying a stock that has the lowest daily price range (high ? low) experienced over the past seven days we are finding stocks that are in a stage of low volatility and are using the inside day parameters to identify when the stock has moved to a stage of high volatility and its direction. Volatility in the stock market has been the subject of many university studies. Time and again it?s proven that volatility in the market is cyclical; periods of high volatility are followed by periods of low volatility followed by high volatility and so on. Many investors chase volatility. When we buy a breakout or sell a breakdown we are identifying stocks that have entered a stage of high volatility and hope to enter the stock at an early enough point in the high volatility stage to profit from the move. [View my instructional video on volatility.] The Inside-day Volatility Set-up is designed to identify short term (three to five days) cycles in volatility and allows us to enter the position at the earliest point in that cycle as is reasonably possible. Often, when this set up is identified at important points of support or resistance the short term trade turns into a profitable intermediate term trade. StockFetcher syntax: /* NR7 ID */ Show stocks where day point range reached a new 7 day low and high is below high 1 day ago and low is above low 1 day ago and ADX(14) is above 20 and close is above $3.00 and average volume(30) is above 50,000 shares Matthew Claassen's Trading Rules Buy if stock price trades above previous day's high. Use an initial stop one tick below previous day's low. Sell if stock trades one tick below yesterday's low. Use an initial stop (for a short trade) one tick above the previous day's high. |
| TheRumpledOne 6,411 posts msg #38410 - Ignore TheRumpledOne |
10/11/2005 4:11:48 PM The Relative Average Oscillator Introducing the Relative Average Oscillator At what point has a weak stock fallen so low it's more likely to bounce higher than to continue to decline? At what point has a strong stock risen so high that, even if it's the strongest stock in the market, it's bound to rest? These are questions that have puzzled traders and market technicians for decades. Market technicians have created numerous indicators designed to measure momentum with the hopes of identifying extreme tops and bottoms. Many of these indicators work very well but, I believe, none approach the issue in the same manner or with the same degree of accuracy as I have found with the Relative Average Oscillator (RAV). The Relative Average Oscillator (RAV) combines measurements of the distance a security or index has traveled with measures of time and volatility. In short, the RAV is a measure of the relationship between the current price of a security and the mean distance of that security from a trailing average. As a result it not only helps to identify price extremes but can also serve as a measure of relative strength. Every security reaches overbought or oversold at a different dollar and percent range from any given moving average. High Beta stocks consistently stretch further from their moving average (above and below) when compared to low Beta stocks. This has been a hurdle that has prevented the analyst from creating system parameters that are consistent from one security to the next and makes a computerized search based on a securities distance from a moving average of little value. The RAV solves this problem by normalizing the distance between the security and a moving average. To normalize this distance the RAV starts with the mean distance a security has traveled from any given moving average over a trailing one year time horizon. Thus a strong stock whose price has, on average, remained 10% above its 50-day moving average for the last year will have an RAV value of zero when its price is 10% above its 50-day average. On the other hand, a weaker stock that has traded no higher than 9% above its 50-day average over the past year will have a maximum RAV value when it reaches 10% above its 50-day average. It's also more likely that at that point the stock will pause and reverse at least temporarily. The chart below shows the Nasdaq Composite and the Relative Average Oscillator (RAV) of two different time frames. The bottom panel is an RAV using the mean distance from the 50-day moving average. The center panel is a combined (sum) RAV using the 30-day moving average, the 50-day average and the 200-day average. The RAV using the 50-day average (bottom panel) is labeled RAV-M for Medium-term and oscillates from 50 to -50. I use the RAV-M when my analysis focuses on an intermediate term time frame. (StockFetcher Example) The RAV in the center is called the RAV-High Jump or RAV-HJ. It is a combination of the RAV's using a 200-day, 50-day and 30-day time frame. The term "High Jump" refers to an indicator developed by Ian Woodward that was a predecessor to the RAV concept. Because the combined RAV in the center panel is the sum of three individual periods it oscillates from 150 to -150. This is the RAV I use for longer term market analysis. (StockFetcher Example) Nasdaq Composite & RAV's This chart is meant to show the RAV's ability to spot market bottoms and for ease of use I have drawn a vertical line marking most of the important lows. I have also indicated the overbought and oversold range on the RAV oscillators with horizontal dashed lines. At zero (0) the Nasdaq Composite is trading at its mean distance from the values set in the RAV. For the RAV-M overbought is reached at a value of 40 and oversold is reached at a value of -40. For the RAV-HJ overbought is reached at 120 and oversold at -120. Note that, with few exceptions, each major low on the chart was either accompanied by or preceded by a sharply oversold RAV. The RAV shows positive divergences at those market bottoms that were preceded by a deeply oversold oscillator reading. In most cases the RAV-M oscillator reached the maximum oversold levels of -50 while the RAV-HJ was in its oversold range at the same the market reached its low. Coca-Cola (KO) Another example of the uses of the RAV Oscillator is seen in the above chart of Coca-Cola (KO). Here too the RAV-M based on the 50-day average pin-points virtually every major bottom in the stock. In addition, many of the rally highs are indicated by RAV-M values over 40. Also note that the zero level is an area of support and resistance. I have found that even when a stock is trading below its major moving averages the RAV level of zero, where a stock reaches its mean distance from the moving averages, is often a strong area of support. An investor or trader who is considering a position in Coca-Cola would have been well informed to check this indicator to avoid purchasing the stock at to high a level or shorting the stock at too low a level. Sina (SINA) The above chart of Sina (SINA) illustrates two other characteristics often revealed through the Relative Average Oscillator. Note that in October and November of 2002 the RAV-M reached a maximum reading of 50 only a few weeks after the RAV-M bottomed below -40. Here the RAV-M oscillated between the overbought levels of 40 and a maximum 50 forming small double tops in the oscillator. This is a bullish sign indicating that the stock is extending its range moving the average distance from the 50-day average even higher. Maximum overbought RAV readings shortly after maximum oversold readings are usually a bullish indication. This is confirmed when any retracement by the stock maintains an RAV level above zero. In July of 2003 Sina reached its maximum positive momentum and began to trade sideways for the next year. The RAV-M formed a small double top in the overbought zone then began a multi-month decline towards oversold. Although the RAV-M reached oversold at the November low for Sina, Sina did not bottom until the RAV-M reached a maximum oversold reading of -50 in May 2003. This is not an uncommon feature. Very often long periods of non-trending consolidation in any equity continue until an RAV using intermediate or long term averages reaches a maximum oversold level. Note also that we can use trend-lines with the RAV. Even though Sina is just now beginning to overcome its 50-day and 200-day averages, any further strength will bring Sina to a higher peak in its RAV and break the trend of lower RAV highs that started in July of 2002. Dow Diamond (DIA) & two RAV's Dow Diamond (DIA) and RAV-HJ Above are two charts that illustrate the Dow Diamond (DIA) and RAV's of three different time frames. In the top chart I show the RAV-L which uses a 200-day average and the RAV-M using the 50-day average. The second chart of the Dow Diamond also illustrates the RAV-HJ which combines the 30-day, 50-day and 200-day averages. Where each of these RAV's are similar and do an excellent job of spotting market bottoms the biggest difference is in how they mark market highs. Because equities tend to stay overbought for longer periods of time than they remain oversold market highs are typically more difficult to pinpoint than market lows. The RAV-L identified the major highs in the Dow Diamond (DIA) for 2001 and 2002 quite well. However, in 2003 when the markets went on their longest period of time without a 5% correction in several years the RAV-L seemed to get stuck oscillating around the overbought zone. We could tell when the RAV-L finally broke down from its trading range in early 2004 that the DIA was about to undergo its deepest correction since the market bottom in 2003. Still, between early 2003 and early 2004 the RAV-L did little to help us identify market tops or bottoms. The RAV-M did a better job spotting market tops during this time period by identifying the temporary high in June of 2003 and again in December 2003. Unfortunately, to do so the RAV-M sacrifices some of the accuracy of marking important bottoms. I have found in most cases the combined RAV-HJ finds the best of both worlds. Because it is two-thirds RAV's of short to intermediate-term timeframe it does a better job of spotting market tops than the RAV-L. In addition, its use of the long term RAV gives it superior bottom spotting capabilities than the RAV-M. It's this RAV-HJ that I use most often. Trade Ideas There are numerous ways a trader or investor can incorporate the Relative Average Oscillator into the trade or investment decision process. Below are just a few methods I have tested. In a future article I will show how we can use the RAV concept to develop a system of identifying the strongest and weakest stocks. When a market has experienced a sharp sell-off it's those stocks that are the most oversold that tend to provide the greatest percentage bounce short-term, not the previously strong stocks as if often assumed. A simple method for identifying the best bounce candidates is to sort for those stocks whose RAV value is most oversold when the market is in a corrective phase. Thus a search for stocks whose RAV-M = -50 or whose RAV-HJ = -150 will pull up a list of potential short-term bounce candidates. Once you have identified a potential investment using your other search parameters check its RAV value. Stocks whose RAV-M is greater than 45 or RAV-HJ is greater than 135 may be too extended for a safe entry. Trade Set-Up: Set a search for those stocks whose RAV-HJ =< -125 AND whose RAV-L = -50. Buy and hold until RAV-HJ = +50. In back tests on the Nasdaq 100 from January 1990 to June 2004 this set-up would have triggered 11 trades. All eleven trades were profitable with an average profit of 12.89%, an average holding period of 39 days and a maximum open draw down of 4.41%. (StockFetcher Example) The exit suggested on this trade is often early. You may use a separate exit system for higher profits. You will find variations on the above very successful using an RAV of shorter time periods. Also look at combining the RAV with oversold readings on other oscillators such as Wilder's RSI. In my next article I will share with you how to use the Relative Average Oscillator as a relative strength tool. Matthew Claassen, CMT The Technical View.net |
| morteza471 132 posts msg #38433 - Ignore morteza471 |
10/13/2005 4:23:54 PM TheRumpledOne is it possible to add line to your filter to fined stocks that for last 3 or 6 month if they had a pull back never went below ma(20)allways used ma(20)as a support and moved up again. i know i am asking too much,but i had to ask. thank you |
| TheRumpledOne 6,411 posts msg #38455 - Ignore TheRumpledOne |
10/14/2005 3:48:54 PM I added the CxM20 column. If it is below 60, then the stock was below the MA(20) within the last 3 months (60 trading days). Hope that helps. MAY ALL YOUR FILLS BE COMPLETE. |
| Stocksight 33 posts msg #43255 - Ignore Stocksight |
4/28/2006 12:48:28 AM This an older post in a public forum regarding RAV: Speaking of oscillators; I have been working on / with an idea derived from % distance from a moving average. Instead of the % distance from a moving average I have substituted the "% distance from the average % distance from a moving average" and converted the data into an oscillator. This creates a system that allows for a computer search / analysis of stocks that are extended above or below any given moving average normalizing for the fact that volatile stocks extend further than less volatile stocks. The end result is an indicator that, among other uses, identifies bottoms very well. I call this my Relative Average Oscillator (RAV) http://65.19.168.195/pers/20_XAU_D.gif The chart of the XAU suggests that at least a short term low is near at hand. Matthew |
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