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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank -- Ignore unavailable to you. Want to Upgrade?

To: fvillelli who wrote (103268)	6/21/2000 9:26:00 AM
From: Wayners	Respond to of 120523

I use an indicator that measures the frequency of reversals in any particular stock. The greater the number of reversals in any particular time frame/look back period tells me the price action and sustained momentum of any kind is much less likely. A .30 for instance means that the stock a stock will generally move up for 3 or 4 days before reversing. A .4 means that a stock will only move for 2 days before reversing. A .5 and you can only expect a 1 day move. It tells me how to trade a stock. Buy .5 stocks on down days (c<open) and buy .3 stocks on up days, preferably intraday on a nice dip and hold. The indicator is calculated by summing changes in direction of a very short term moving average and dividing this by the length of the lookback period you are interested in. I call the indicator predictability. I compare the Average True Range of its stock to its predictability to get a risk/reward ratio. Most stocks aren't worth trading.