I have been trading for about 8 years now but only in Bullish Markets. I am by all rights a short term Swing Trader or 5 to 10 day plays. I understand that there are no "holy grails" for trading but on the technical side of things is there a proven indicator or group of indicators that seem to work well. I have a back scanner program to test any ideas. I am only at this point in time looking for short side as I am very comfortable with the Long side. I have both Telechart and Stock-finder for technical analysis. Any tips worth back testing would be appreciated. Thanks in advance.
Trading indicators are best used along with money management and good risk control, using tesnical indicators alone will not enable you to ne a successful trader, the market is just too random
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I look for the put call ratio to be very low and begin to rise. I also look for the new individual stock highs to peak and drop off while the market is still rising. A spike in volatility while the market is at new highs is the signal to get out now or go short.
What i use is a combination of indicators i use an to identify selling points i use an 8 day RSI>75 , Stochastic 8,3,3 >75, and a 10 day Money Flow Index (MFI) >70
Hope that helps some.
Since you are a swing trader maybe you’d like to swing trade on the short side. Scan for stocks trading below the 100- and 50-day moving averages with the MA lines moving downward.
I also use ADX (7) and Full STO for additional information and confirmation. I look for stocks that have an ADX over 25 with the line either moderating or rising with the -DI also above 25.
Then I look to see if the STO was recently above 80. The more recent the better.
I’ve included an example on my website of NWPX (via the link below) although it’s a stock that’s too thinly traded but it’s a good example of the strategy. The two green bars identify potential short entries.
Best of luck!
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When one looks outside the box(inventor), goes against the group(thinks for self), said they found(developed) something that is supposed to be impossible(airplanes), they were once killed. Now these people are called bad names and delegated to be unheard, and ignored group.
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I developed multiple arbitrages that enable me to trade(not invest) in the financial markets, without risk(The Holy Grail to Investing), or arbitrage that anyone can do. Over 30% a year.
Thomas Adair
thomasadair@live.com