tag:blogger.com,1999:blog-20374666.post698136910305502970..comments2024-03-05T07:50:04.017-05:00Comments on Stockbee: Liquidity is cyclicalPradeep Bondehttp://www.blogger.com/profile/16750002566366368685noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-20374666.post-32696064788978504492007-04-10T07:10:00.000-04:002007-04-10T07:10:00.000-04:00I will answer the question with seperate post late...I will answer the question with seperate post later.<BR/>Anyone reading this blog for any length of time knows that I am not trading a Goldman Sachs size portfolio.Pradeep Bondehttps://www.blogger.com/profile/16750002566366368685noreply@blogger.comtag:blogger.com,1999:blog-20374666.post-43523703918562409722007-04-09T18:51:00.000-04:002007-04-09T18:51:00.000-04:00You did not really answer the question? In such i...You did not really answer the question? In such illiquid stocks, how do you get out if it trades against you? This is at best a 50-50 business so you must have a rule to ensure your position size does get too big relative average volume. Or not? Maybe 10% of 30 day average volume? In general, I do not think you are trading much money, because otherwise you would have such a risk parameter.pleadershiphttps://www.blogger.com/profile/00401636668019314069noreply@blogger.comtag:blogger.com,1999:blog-20374666.post-26539859770737464772007-04-09T08:01:00.000-04:002007-04-09T08:01:00.000-04:00AlokPlease see my earlier post:http://stockbee.blo...Alok<BR/>Please see my earlier post:<BR/><BR/>http://stockbee.blogspot.com/2007/02/float-and-ibds-top-supply-demand.html<BR/><BR/>The idea is slightly different, it is not for entry timing, it is for selecting stocks which qualify for "Neglect" strategy. The central idea behind that is based on <BR/>Norman Fosback's Volume Turover Ratio. <BR/><BR/>Norman Fosback in his classic book Stock Market Logic provides a <BR/>Volume Turnover Ratio to select stocks in portfolio.<BR/>Volume Turover Ratio is calculated by dividing total trading volume in a stock over last six months by the total number of shares outstanding. The result is multiplied by 2 to convert it to yearly. Norman Fosback book offers number of detailed studies on effect of stocks floats and supply in general on stock returns.<BR/><BR/>That is in short the concept behind what I do in one of my "neglect" scan.Pradeep Bondehttps://www.blogger.com/profile/16750002566366368685noreply@blogger.comtag:blogger.com,1999:blog-20374666.post-63951964692378509762007-04-09T07:55:00.000-04:002007-04-09T07:55:00.000-04:00MuddyThanksYes you are right, the way most people ...Muddy<BR/>Thanks<BR/>Yes you are right, the way most people scan for stocks, they eliminate some of the best opportunities. <BR/>Most take conventional wisdom about liquidity as gospel truth, that is good, because it creates opportunities for traders like you and me who understand the flaw in the logic. <BR/>Dave<BR/>Thanks<BR/>You can use TC2007 or Stockfetcher and replicate many things. Those two software give you workable solutions, may not be perfect solutions.Pradeep Bondehttps://www.blogger.com/profile/16750002566366368685noreply@blogger.comtag:blogger.com,1999:blog-20374666.post-76724895277516405772007-04-09T00:39:00.000-04:002007-04-09T00:39:00.000-04:00Pradeep, in line with what Dave just said, what do...Pradeep, in line with what Dave just said, what do you look for in a liquidity breakout. Do you look for a % break of prior days volume or an avg of some number of days vol, or ......<BR/><BR/>and do you limit your scan to stocks below a certain value or with limited float?Alokhttps://www.blogger.com/profile/10795507799264407894noreply@blogger.comtag:blogger.com,1999:blog-20374666.post-41980717398229126832007-04-08T20:50:00.000-04:002007-04-08T20:50:00.000-04:00Thanks Pradeep for taking the time to give such a ...Thanks Pradeep for taking the time to give such a thorough answer. When I think of how I could trade some of your ideas, one problem for me would be learning to program excel or some other software to scan for these stocks. Some of your ideas are so compelling though I may have to learn how. Thanks for sharing your ideas and you time.<BR/><BR/>Davedavehttps://www.blogger.com/profile/05852078654148939418noreply@blogger.comtag:blogger.com,1999:blog-20374666.post-29065714711766291552007-04-08T20:49:00.000-04:002007-04-08T20:49:00.000-04:00Again another great post.I've told folks for years...Again another great post.<BR/><BR/>I've told folks for years when one scans for stocks breaking out DO NOT use any average volume criteria,if you do you are defeating the purpose of finding the ones that had former low volume that now may begin to be big time trading vehicles.<BR/><BR/>Regarding 0 volume stocks I've seen it for years (and I'm now into my 43rd year of trading) where they do exactly what Pradeep says.<BR/><BR/>In fact if one goes here I talk about these 0 volume stocks:<BR/><BR/>http://greenonthescreen.blogspot.com/index.html<BR/>Use the search box for "0 volume stocks"<BR/>It is the March 18 post titled Former Zero Volume StocksAnonymousnoreply@blogger.com