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Strategies & Market Trends : Ride the Tiger with CD -- Ignore unavailable to you. Want to Upgrade?

To: ceejayt who wrote (103365)	1/16/2008 7:38:11 AM
From: E. Charters	Respond to of 313907

Jake Bernstein has about 30 books which go over the indicators. He is a fan of momentum crossing its own moving 14 period average and key reversal. I programmed about 20 of his formulae into tradestation. I found they predicted S&P moves with about 70% accuracy if you used the right combos/periods. You need volatility to make money day to day. Right now that is a given. From mid 2004 to 2006 S&P was not volatile enough to make real money. Momentum is the day to day or period to period move of a stock, positive or negative. Price change. You can weight it with volume and it becomes money flow. If a stock's price change moves across its own moving average of its price changes, then it heralds an upward move fairly accurately. Key reversal is a matter of these principles: After an up-trend: * The Open must be above yesterday's Close, * The day must make a new High, and * The Close must be below yesterday's Low. After a down-trend: * The Open must be below yesterday's Close, * The day must make a new Low, and * The Close must be above yesterday's High. A sharp reversal pattern occurs during a trend. In an uptrend, prices open above the previous day's close, make a new high and then close below the previous day's low. In a downtrend, prices open below the previous day's close, make a new low and then close higher than the previous day's high. The greater the price range and volume on the key reversal day, the more reliable the signal. It is strong indicator and very predictive. But you have to wait and watch for it to happen in a day trading situation. And you don't have much time to act. It is worth programming a signal to pager for. If you use Camarilla, which I also have a formula for, and these principles while managing your money according to getting out at one point losses, while cutting profits at 1 to 2 points you can keep your shirt. Real trends that you can afford to hedge for a few days like gold moving forward, can make you scads of money. Camarilla is based on statistical formula and the principal that an instrument or stock moves is influence in any one day most by the previous day. You have to use it with rules concerning the directions and position relative to your 5-6 stat-established support/resistance levels in the following day. Good way of keeping track of trends. Combine the support resistance with point gain/loss money management and you can keep your shirt and perhaps buy a few buttons ocassionally. The only thing that really tells you what a stock will do in advance is the money moving into and out of the stock creating pressure. You could use volume and money flow to do this, but it is kind of tricky. Generally in the penny stocks support is so rare, that any sort of high volume and upward move of substance heralds something happening in the promotional cycle. This means that given some chance of fundamental success, these cycle indicators have real meaning which helps pick out the movers from the herd. If you have a scan type program that uses a handful of indicators over a basket of stocks, then you can find the ones that are signalling. If you combine fundamentals with tech indicators you can find movers before you know the reason for their move. Finding out is there really are more buyers than sellers and vice versa is an important stat. Money flow indicators purport to do this: "[Money flow is] an indicator that calculates an indexed value based on price and volume for the number of bars specified in the input Length. Calculations are made for each bar with an average price greater than the previous bar and for each bar with an average price less than the previous bar. These values are then indexed to calculate and plot the money flow. The use of both price and volume provides a different perspective from price or volume alone. The money flow indicator tends to show dramatic oscillations and can be useful in identifying overbought and oversold conditions." BTW, if the FED loosens the pursestrings, then gold will hit 980. They think 15 cents of every dollar invested is at risk right now due to the 200 billion dollar loss in capital markets. EC<:-}