Wednesday, February 14, 2007

Day Trading with BOB

A new day a new idea – actually an old idea with a modification. What I did was modify my Blow-Off Bottom (BOB) filter to output the first two candles only. In other words – it will be up to me to determine if the third candle is being formed or not in real-time and to act on it if it is.

It then occurred to me that the output could be used for a day trade – and then I would be day trading with BOB.

Filters from - here is the filter

/*This filter finds the first two days of the triad - you have to determine the third piece in real time*/
show stocks where close is between 15 and 25
and average volume(90) > 500000
and close 1 days ago < ema(8) 1 day ago /*this line helps ensure that I'm looking at distressed stocks*/
and close 1 days ago < open 1 day ago
and close < open
and high < high 1 day ago
and volume is more than 20% > volume 1 day ago
and low < low 1 day ago
and draw ema(8)
and draw ema(21)
and add column average true range(10)
and sort on column 5 descending

Charts from


Anonymous said...

I enjoy reading your blog and want to thank you for sharing your filters. With all the lessons you are giving out, maybe one day soon I'll actually have a profitable trade from using a filter. It's been two months since I started with stockfetcher...guess I'm a slow learner.

I noticed your new BOB example ETFC hit the lower B.Band and bounced. Hmm, do you think incorporating the LBB condition ala Muddy will produce deadlier results?

Keep up the good work.


Marlyn Trades said...

Slotmonkey - I like the handle -

I like Bollinger's amazing Bands but you can't really use them for timing trades. You can use them for finding distressed stocks but there are several ways of doing that including the donchian channels (also included in stockfetcher), new 10, 20, 30 day lows and so on.

One other consideration if you add a Bollinger constraint you will slim the list down quite a bit and sometimes your best trades are those that just dip down into the middle of the bands and then rebound off the 20-period MA that form the basis of the bands.

So saying - go ahead and try it and if you see publishable results please let me know.


Great post