Friday, April 06, 2007

Philip's Set-Up

I wrote in yesterday's Wrap about Philip and the neat set-up he designed and gave to me - and this is a beauty. I will tell you though on a daily basis, while it works and works well, it back tests poorly. I haven't worked that out yet so you'll just have to take my word for its efficiency on an anecdotal basis - for now. Anyway I put together a few charts for you to look at and wonder at and especially wonder why you didn't notice something this simple (I know that's what I'm doing). And I've provided the code for the paintbar on the first chart below and those of you who want to work with it in stockfetcher can derive the SF code from the paintbar code. (Instead of using "[3]" use "3 days ago" for example).

Chart 1 is a daily chart to show the basic parameters of the set-up.

You can see that it is a 4-rule test that takes into consideration four volume bars and two closes. Can't get any easier than this and if you pull up a bunch of charts you will start seeing this everywhere.

But the place where this seems to really work is on the minute based charts. Here is GGB for example on the 15-minute charts. The "green diamond" is the signal device.

I selected this chart because I wanted to show that the indicator didn't fire every day. In this case there were no signals of this type on this stock on Wednesday. Only a couple of tweezer bottoms and only one actually meant anything.

Here are the Q's also on the 15-minute chart -

On this one you can see that unlike GGB there was no gap down on the open and the previous day's signal carried over to the next day (from Wednesday to Thursday).

It also works on the 30-minute charts - here is GRA with the 30-minute version -

That purple bar in the initial slot is signaling an RSI(2) < 2. But mid-day the green diamond appears. That would suggest if you are already in the stock to load up some more for a day trade. Or don't you day trade stocks in your portfolio? If you don't you are missing a great bet.

And finally, on the 3 minute charts which I like to use to play cheap stocks (I use 4-minute on higher priced stocks and then only to watch for turns).

This shows how the signal when occurring around a pivot point is extremely powerful. It also shows that there are no signals on the down leg of the run. I don't know if that is a coincidence but it seems mighty suspicious.

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