The hundred year old art of swing trading Part4 | stockbee

6/26/2009

The hundred year old art of swing trading Part4


Basic building blocks for Dave Landry's Persistent Pullbacks will be :

Scan for 20 day persistence.
One way to do this is using our relative linearity or fractal efficiency scan. The Relative Linearity or Fractal Efficiency scan in Telechart can be done as:
(C - C20) / (ABS(C - C1) + ABS(C1 - C2) + ABS(C2 - C3) + ABS(C3 - C4) + ABS(C4 - C5) + ABS(C5 - C6) + ABS(C6 - C7) + ABS(C7 - C8) + ABS(C8 - C9) + ABS(C9 - C10) + ABS(C10 - C11) + ABS(C11 - C12) + ABS(C12 - C13) + ABS(C13 - C14) + ABS(C14 - C15) + ABS(C15 - C16) + ABS(C16 - C17) + ABS(C17 - C18) + ABS(C18 - C19) + ABS(C19 - C20))
Using above scan you can pick stocks with greater than +0.30 readings. They tend to have smoother trends.

Scan for 20 day persistence.
Or another way is by defining persistence as ability of stock to make say a new high every 3 or 4 days. A scan for that would be , if using 4 days:
C >C4 AND C1 > C5 AND C2> C6 AND C3 > C7 AND C4> C8 AND C5 > C9 AND C6> C10 AND C7 > C11 AND C8 > C12 ANDC9 >c13 and c10>c14 and c11>c15 and c12>c16 and c13>c17 and c14>c18 and c15>c19 and c16>c20

Scan for stocks up 10 points in 20 days
Stock should be up 10 points in 20 days prior to pullback, one of the ways to do this is:
((C1 - C21) > 10) OR ((C2 - C22) >= 10) OR ((C3 - C23) > 10) OR ((C4 - C24) > 10) OR ((C5 - C25) > 10) OR ((C6 - C26) > 10) OR ((C7 - C27) > 10)
This gives you stocks in last seven which had 10 points move in last 20 days.


Condition to show trend resumption after such a pullback:
C>c1and c>h1

Some liquidity condition to eliminate low volume stocks:
AVGV20 > 3000 or
you can use Volume (Dollars) 1 day greater than 10 million or
MINV3.1 > 1000

This is just one of the ways to translate it in to Telechart.

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