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Strategies & Market Trends : DAYTRADING Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: Bill J who wrote (5909)	12/9/1999 12:21:00 AM
From: OZ	Respond to of 18137

Bill, Put up a 20 SMVA of the highs and A 20 SMVA of the lows and the difference is what you are looking for. You can us a 30, 40, or whatever average you want. Or you can use ATR (Average True Range) if your software allows it... OZ

To: Bill J who wrote (5909)	12/9/1999 8:02:00 AM
From: Matthew L. Jones	Respond to of 18137

The best way I know to compute the average movement (in any time frame) is to make a chart in that time frame as follows: 1) Make simple bar chart 2) Add a short MA (I like to use 5 period) calculated off of the highs 3) Add another MA (same time period) calculated off of the lows Viola. The difference at the last bar is the average range. Works pretty well, too. I've tried using the average 5 minute range (calculated the same way on a 5 min chart) as a stop loss, but it really seemed a little too arbitrary to me. I like the approach Alan has to stops (when you are proved wrong). Like he says though, that means you have to carefully evaluate your entry to insure the "where I'm proved wrong" point is within your dollar risk parameter. Anyway, I'm not sure why I got into all of that. I haven't used average range for exit targets. I typically use a combination of natural resistance areas and statistical analysis (average extent and duration of intraday market moves). That is impractical to do using a huge universe of different stocks. You could probably do it using a list of 10 or so, but much beyond that it would be hard to manage. Let us know how it works (using average range for developing exit targets), as many of us are always looking for fresh ideas that work. Join in the converstion more often-- we would appreciate your input. Matt