Does earnings matter if you are trading momentum burst | stockbee

9/11/2014

Does earnings matter if you are trading momentum burst

We have many beliefs and assumptions about how stocks move and markets operate. In order to successfully trade a specific setup you must have right beliefs and assumptions about that setup and that time frame.

A  momentum burst is a short term swing trading setup that looks for 8 to 40% move in 3 to 5 days. Now in order to trade this kind of setup you must thoroughly look at all your assumptions. A deeper understanding creates conviction in setup.

Yesterday I asked a question Does relative strength matter if trading momentum bursts Your Answer to it will determine how you trade that setup. You might start with certain assumptions and then change them over period if you see different results.

Not everyone can change assumptions and beliefs. Some people are fixated on certain beliefs and their behavior is driven by it. Also certain kind of environment is ideal to changing assumptions and beliefs. This tends to happen in group situations where blind beliefs do not get accepted and get challenged.

The question for today is simple: Does earnings matter if you are trading momentum burst

The answer we can find ourselves by going through stocks up 8% plus in last 5 days. To do that in Telechart you can run two scans.

Bullish 8% plus or 5 dollar plus in 5 days

c/c5>=1.08 or c-c5>5 and minv3.1>100000 and c>=5

Bearish 8% plus or 5 dollars plus in 5 days
c/c5<.92 or c5-c>5 and minv3.1>100000 and c>=5

That is just one day of data , if you are really serious then you can study this for years worth of data. From the study you will be able to answer the question: Does earnings matter if you are trading momentum burst


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