I am searching for an indicator / indicator pair that I can use to weed out stocks that are super choppy. There is an article on this topic here: http://stockbee.blogspot.com/2007/05/how-to-find-stocks-with-smooth-trends.html. However, I haven't been able to find a way to use the KAMA to properly achieve the effect that I would like. Any ideas are appreciated. Thanks
How to find stocks with smooth trends
- Thread starter rosco9awj
- Start date
There is no absolute predictor, otherwise everyone would be wealthy. But here are a couple of ideas for you to entertain.
The lower your stat vol is, the smoother the ride which is based on the underlying stock.
Beta can sometimes help, but use with caution. When you see a beta of 1, that means, in layman's term, the stock usually moves in concert with the market.
Good luck
I have been using thinkorswim for charting data.
Would ATR indicate choppyness with a stock?
I know you can scan via beta with finviz
I know you can scan via beta with finviz
What we're talking about is intraday volatility. You have to quantify what you mean by "super choppy." In what time frame? If from 10-11am the standard deviation is, say, $0.25, would you call that "super-choppy?" For SIRI, that's super-choppy; for FB, that typical, and some would even call it "smooth."
The key is to establish a baseline for the financial instrument in question, and then make decisions from there. If we agree that "smooth" means a standard deviation of $0.05 over time t, and over another period of time t the standard deviation is $0.25, then it's "super-choppy."
Something like this: let's say that a baseline intraday volatility is $0.10 over time t. Then the following makes sense:
Assuming a period time t = 10 minutes, we can say things like this:
10:00-10:09am: smooth
10:10-10:19am: choppy
10:20-10:29am: dead
10:30-10:39am: super-choppy
10:40-10:49am: smooth
10:50-10:59am: downspike
Also it's important to note that, although the volatility figure may be the same, the actual chart can be radically different. The following two have about the same standard deviation over the same amount of time, and number of data points:
Simply put, it's not so easy what you're asking for. I've been noodling on this for a few days now.
The key is to establish a baseline for the financial instrument in question, and then make decisions from there. If we agree that "smooth" means a standard deviation of $0.05 over time t, and over another period of time t the standard deviation is $0.25, then it's "super-choppy."
Something like this: let's say that a baseline intraday volatility is $0.10 over time t. Then the following makes sense:
Code:
STD LABEL
0.01 dead
0.05 smooth
0.10 baseline
0.15 choppy
0.20 really choppy
0.25 super-choppyAssuming a period time t = 10 minutes, we can say things like this:
10:00-10:09am: smooth
10:10-10:19am: choppy
10:20-10:29am: dead
10:30-10:39am: super-choppy
10:40-10:49am: smooth
10:50-10:59am: downspike
Also it's important to note that, although the volatility figure may be the same, the actual chart can be radically different. The following two have about the same standard deviation over the same amount of time, and number of data points:
Code:
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o o
o o
o o o o
o
o
o
o
o
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News, be aware of calendar events, have the S/R's ready.
+1 * million
This !!!!!!!
There is no holy grail because :
(a) Everyone would be rich
(b) Even if there is (which there isn't !) a holy grail, nobody's going to tell write it down for you in a book, the internet, twitter ... medium of your choice.
Why do you think the HFTs and Algo funds employ so many rocket scientists ? Not because "they can", but because to maintain their minuscule, tiny, little "edge" against the lesser-mortals who trade the market, all those clever geeks need to continue adapting and refining those algorithms as the irrational market continues along its random path.
A so-called Holy Grail in Trading...is like the Excalibur sword...even if it were to be disclosed...only the ideal, right person could make it work fruitfully
it would truly be Discretionary trading. -- because trading is part art, part science.
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