Hi Abe,
Jerry Gatto once suggested a short term system. I've been playing around with it recently, mostly with a 5-15 days timeframe. It looks promising to me, maybe you can adjust it to 2-5 days or so (seems very short).
Give it a try and let me know how it works.
Here's what Jerry posted (can't find the link):
Hi Andy,
My favorite tool is the stoch(7,3,10).
Simple rules:
1)If the stock is in an uptrend,
{*above a trend line drawn OR
*above a favorite moving average, say 28ema}
2)and the slow line of the stochastic is above 50
while the fast line is very oversold,
3)wait for the fast stoch to turn up and/or a
price reversal and you may catch a wave.
Sometimes the price and stoch turn up right
where the trend line or the mov avg were drawn.
Price breaking below the mov avg or trendline is reason for concern
as is the slow stoch going below the 50 line. Both scenerios
usually indicate that the uptrend is over or at best,
that there will be a sideways consolidation.
I use the above with CCI and my own mov avg bands for confirmation,
but thats another discussion, a disscusion of systems.
Its good to use other indicators but not too many more.
You want them to compliment but not to complicate BUT they
are indeed valuable and neccessary when used optimally.
So, the stoch(7,3,10) is my favorite short term tool.
28ema of price also mentioned is another favorite,
it will usually tell you how well the current trend is
performing and alert you with hints of an impending
reversal of direction.
A decent example of this was CKFR-
Sept 9 - Sept 16 1996
Regards, Jerry |
