Ok, for those with a little time on their hands, and the ability to pull up intraday charting, try this out. I've been toying with it for quite a while now and find it quite interesting....actually, fascinating. It's a lot to wade through here, but hopefully a few of you will try it out and see what you think.
1) Pull up your fav stock for the day on the intraday chart. (Oh ya, a good thing to do here too is to go back into your historical data and pull up a certain day where there was volume/movement, and pretend it is "that day". i.e. you can intraday chart any particular day that is past, just to test the theory out.
Note: The stock you chose should obviously have decent volume.
2) Put on a simple moving average with a period of 12
3) Pull up a MACD indicator with period one being 8 and period 2 being 18.
4) Set a timeframe for refreshing of 3 minutes.
With these settings, you have two things analysing the data. The moving average tends to be the more volatile. The MACD, the calmer cousin.
Now, here's the rules. Both the moving average and the MACD have to "agree" for any action to be taken. (buy or sell). If one indicator says one thing, and the other another, then do nothing. Hold the status quo. (eg, if you're in, stay in...if you're out, stay out.....if both say "buy", then buy....if both say "sell", then sell.
a) If the current price is above the moving average, then that signals a buy (or if you're already in...to stay in). If the price moves below the moving average, a sell is triggered (IF the MACD agrees)
b) With regard to the MACD, if the red line is above the blue, then a buy is signaled (or a hold if you're already in.) If it crosses below the blue, then time to sell (again, if and only if the moving average agrees.
There will be lots of times that the indicators do not agree. Again, that is a signal to do nothing with whatever your current position is. It's sort of like a "Siskel and Ebert" kind of thing. You're looking for a "two thumbs up", or "two thumbs down" to take action from whatever your current status with that stock is.
Test it out and see what you think. It takes a while getting used to reading the chart if you haven't done this before, but I think it's definitely worth it. It has been particularly useful in slowing me down...not getting to jumpy on either the buy or the sell side. (I need that!)
More later...if you wish. There's lots to go over I would love to hear other people's systems as well. Right now the charts are saying to "go out and enjoy a sunny day". Damn those charts are good! :)
Kevin
Hey, take a look at HPC. OUCH!!! Not approved in Australia huh. Now is the news THAT bad?? Hmmmm . Nothing like volatility! :) |
