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RE: Beginners Questions - arkyuan - 2018-04-25
(2018-04-20, 08:05 AM)isatrader Wrote:(2018-04-20, 01:31 AM)arkyuan Wrote: Hi guys,
I'm new. I just finish with the book and I have few questions...
What tool does everyone use to screen the stocks and what are some screen conditions you recommend? There is a thread for code for scanners, is it still relevant? what's the difference for stockcharts and prorealtime? I read that stockcharts is mainly for US and need a subscription to get zero line? what about prorealtime?
my plan is to follow the buying process recommended in the book which means
a screener for the over all market trend (I invest mostly in US) based on P/D ratio, world market average chart, weekly high low figure, momentum index, A-D (stuff from the book)
a screener for the strong sectors,
and few strong stocks in that sector ,not sure if it's doable, maybe based on resistance,volume, RP, head & shoulder bottom, double-barreled action, big base etc... and filter out manually according to the sectors myself
maybe another screener for the triple confirmation pattern
then I think I should be able to pick up a few stock based on the results?
I hope I'm on the right path...if not let me know,
thanks,
Hi Arkyuan, welcome to the site
I've used multiple tools over the years for screening, but the two I use the most is stockcharts.com and prorealtime. Although I'm sure any screener that lets you custom code your scans and indicators will do. As you need to be able to custom code the scans in order to focus the scans on the requirements that you are looking for, and exclude stocks that clog up the scans that you wouldn't trade. Which for example for me is over the counter stocks in the US.
The thread for Code for Stock Scanners is still completely relevant. I posted a number of scans that can be used in the free prorealtime scanner, as well as a couple that I use in the stockcharts scanner which is a paid for service.
It's great that you want to get stuck in after reading the book. However, take your time and practice the Stages first. Get to know the transitions between the stages and where the entry points would be. As once you have a good grasp of the Stages you can then move on to learning the market breadth indicators and refining the stocks candidates that you are looking at based on the the key criteria - Price action, Volume, Relative performance versus the market and Resistance.
I created a basic checklist in the following thread to help with that: Stage Analysis Breakout Quality Checklist
There's lots to learn. So take it slowly, but if you do jump in quickly then make sure you are at a minimum managing your risk.
I hope that helps.
Hi isatrader
I have two more questions:
1. In the book, it used 30 weeks MA a lot, but on the forum and chart tools I see 52 weeks MA, 200 day MA...what is better to use?
2. In the book, one of the method to monitoring the market trend is P/D ratio (price/dividend ratio),
14 to 17 normal
26+ dangerous
30+ overvalued
I calculated the P/D ratio today and it's around 35+ which is overvalued...I was wondering if the range has increased over the year?
Thanks,
RE: Beginners Questions - isatrader - 2018-04-25
(2018-04-25, 05:13 AM)arkyuan Wrote: 1. In the book, it used 30 weeks MA a lot, but on the forum and chart tools I see 52 weeks MA, 200 day MA...what is better to use?
Hi arkyuan, you are misinterpretting this. The 30 week MA is the moving average used on the weekly charts on the board as in the book. See the Study guide thread here: https://stageanalysis.net/forum/showthread.php?tid=47 for marked up examples of how I display the weekly and daily charts on the board.
The 52 week MA that you are referring to is being used on the volume. Not the price. And replaces the 4 week MA on the volume that the method specifies in the book. This is a personal preference as it smooths the volume average on the charts, and make it easier to see when the volume requirement is being met when doing quick manual scans of charts each day.
So go to the Study Guide, and you'll then be able to see how I display the charts on here.
RE: Beginners Questions - arkyuan - 2018-04-25
(2018-04-25, 08:07 AM)isatrader Wrote:(2018-04-25, 05:13 AM)arkyuan Wrote: 1. In the book, it used 30 weeks MA a lot, but on the forum and chart tools I see 52 weeks MA, 200 day MA...what is better to use?
Hi arkyuan, you are misinterpretting this. The 30 week MA is the moving average used on the weekly charts on the board as in the book. See the Study guide thread here: https://stageanalysis.net/forum/showthread.php?tid=47 for marked up examples of how I display the weekly and daily charts on the board.
The 52 week MA that you are referring to is being used on the volume. Not the price. And replaces the 4 week MA on the volume that the method specifies in the book. This is a personal preference as it smooths the volume average on the charts, and make it easier to see when the volume requirement is being met when doing quick manual scans of charts each day.
So go to the Study Guide, and you'll then be able to see how I display the charts on here.
Hi isatrader,
thanks for the note, now it makes clear to me. but I originally got the question when I do my Mansfield relative strength. It mentioned that on a weekly chart it's 52 weeks and on a daily chart is 200 days. 52 weeks isn't 260 days? consider 1 week is 5 days?
Also for the stock chart, I see you put 50 days,150 days and 200 days. can you elaborate a bit on 50 days and 200 days? which I don't see it's being used a lot in the study guide but it's there in the chart.
Thanks,
RE: Beginners Questions - isatrader - 2018-04-25
(2018-04-25, 12:51 PM)arkyuan Wrote: Hi isatrader,
thanks for the note, now it makes clear to me. but I originally got the question when I do my Mansfield relative strength. It mentioned that on a weekly chart it's 52 weeks and on a daily chart is 200 days. 52 weeks isn't 260 days? consider 1 week is 5 days? like 30 weeks MA shouldn't it be 150 days? but I see most MA on daily stock charts are 50,100,200 days.
Thanks,
Yes they are different values on the example, as the daily is set to be a bit quicker. The weekly is the only one you need though, and the 52 weeks is based on my experience with it and info from elsewhere about how it was created, like the chartmill article that states that Stan used the 52 for it here: https://www.chartmill.com/documentation.php?a=398&o=2956
You can of course use whatever values you choose yourself. I've seen people on other sites use the 40 week, which is an approximation of the 200 day. But I've used the 52 week to create the Mansfield RS on every of the 20,000+ charts on here, and it works very well at identifying the correct transition zone to Stage 2 and limits false breakouts.
RE: Beginners Questions - pcabc - 2018-04-25
(2018-04-25, 01:34 PM)isatrader Wrote:(2018-04-25, 12:51 PM)arkyuan Wrote: Hi isatrader,
thanks for the note, now it makes clear to me. but I originally got the question when I do my Mansfield relative strength. It mentioned that on a weekly chart it's 52 weeks and on a daily chart is 200 days. 52 weeks isn't 260 days? consider 1 week is 5 days? like 30 weeks MA shouldn't it be 150 days? but I see most MA on daily stock charts are 50,100,200 days.
Thanks,
Yes they are different values on the example, as the daily is set to be a bit quicker. The weekly is the only one you need though, and the 52 weeks is based on my experience with it and info from elsewhere about how it was created, like the chartmill article that states that Stan used the 52 for it here: https://www.chartmill.com/documentation.php?a=398&o=2956
...
ISA, just checking, a refresher for for myself if you don't mind.
The book prefers the Mansfield RS to be rising, preferably above the zero line and it is very good if it is just crossing the zero line, if I recall. However, for the plots in the book the zero line is flat as the RS has the zero line data (the long MA) subtracted. However, on your charts you plot the RS without the subtracted MA, and the MA itself is the zero line. There is a newer rule that the zero line (the lon MA) must be rising. I hope I have recalled this correctly.
(2018-04-25, 07:57 PM)pcabc Wrote: ISA, just checking, a refresher for for myself if you don't mind.
The book prefers the Mansfield RS to be rising, preferably above the zero line and it is very good if it is just crossing the zero line, if I recall. However, for the plots in the book the zero line is flat as the RS has the zero line data (the long MA) subtracted. However, on your charts you plot the RS without the subtracted MA, and the MA itself is the zero line. There is a newer rule that the zero line (the lon MA) must be rising. I hope I have recalled this correctly.
Perhaps answering my own question with the pointers to ISA's previous checklists:
https://stageanalysis.net/forum/showthread.php?tid=54&pid=5196#pid5196
and the following post.
RE: Beginners Questions - arkyuan - 2018-04-27
hi Isa,
what is the acronym ATR(52weeks) in your journal mean?
also how much volume is consider liquid for you?
RE: Beginners Questions - isatrader - 2018-04-27
(2018-04-27, 02:46 AM)arkyuan Wrote: hi Isa,
what is the acronym ATR(52weeks) in your journal mean?
Hi arkyuan, it is the 52 week Average True Range of a stock http://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:average_true_range_atr. I use it to gauge a stocks volatility over the last year, so that I can get an idea of the stocks normal weekly movement, so that I won't get shaken out of a trade by a normal movement that might seem large otherwise if I didn't understand it's normal range. As each stock has unique volatilty.
I also use it as a key part of my risk management strategy, as I calculate my position size using it to neutralise the volatility differences between all the stocks I trade. So for example my position size in a highly volatile small cap will be much smaller than my position size in large cap with low volatility.
The other key use I have for it is my maximum stop loss position, as I aim to never risk more than a maximum of 2% of my account on any trade, so as it is used for my position sizing, each 1x ATR move is the same as 1% in my account. So if a breakout is more 2x the 52 week ATR amount from an accepatable stop loss position then I'll pass on the trade, as I'm always looking to minimise risk on my entries. As I've found it's much easier to be profitable if I keep my loses as small as possible. So the ATR helps me with that.
It is not part of the method. It is something I've developed for myself over the last 10 years or so.
(2018-04-27, 02:46 AM)arkyuan Wrote: also how much volume is consider liquid for you?
I generally want to see at least one million shares traded on the volume on the daily chart breakout. So an average of about 500,000 a day I'd say I would consider as a minimum. Although I do occasionally consider less.
Stage 2A breakout example - isatrader - 2018-05-03
ATTU was highlighted in the watchlist thread just over a week ago on the Tuesday that it made it's Stage 2A breakout attempt
I wanted to post this marked up chart as I thought it was a good example for people learning the methods Stage 2A entry point, and what it looks like when a stock makes a Stage 2A breakout attempt early in the week like it did. As most of the time, to get in at the correct entry point like this, you have to make a judgement based on the stocks daily volume increase on the breakout and the daily closing position on the breakout day, and whether if you extrapolate that volume forward to the end of the week it will meet the 2x requirement.
So in this example the daily volume was three times the daily average (I use the 200 day moving average on the daily volume) on the breakout day, which was a Tuesday, and the weekly volume was around 1x the weekly average. So based on the volume increase on the breakout, and the fact that it had already made 1x the weekly average by the Tuesday, the assumption would be that it would be able to meet it's 2x requirement by the end of the week. So the entry would be made on the assumption of the requirement being met, but then if it wasn't it would be exited at the end of the week.
In this case, it was, and then it has followed through this week with increasing volume, which is what the method looks for after the breakout. So I thought this was a good example to show.