The Best Stock Move Indicator
- Thread starter exce26
- Start date
There is no "best indicator". It depends on your strategy and desired outcome. Are you trying to scalp a stock for 1/4 or capture 5 points in the next several days?
How much are you willing to lose on any particular trade?
I can say, however, that flipping a coin is probably your "worst" choice.
How much are you willing to lose on any particular trade?
I can say, however, that flipping a coin is probably your "worst" choice.
Exce26,
There is no such thing as the one best indicator to determine stock movement. There are many factors that determine the course of a stock. In fact the list in your post are all elements that together form a somewhat cohesive idea. When trading, this is the checklist that you must follow from my own experience.
1) determine your trading time frame, will it be intraday, several days or long term. Day trading is intraday.
2) pick a stock or several that have decent trading volume, between 500k to 1M at least. Also that they move in at least a point or two daily.
3) determine their 10 day, 30, and 5 day trend to see where you can enter.
4) finally, in the intraday trading, use stochatic indicators to determine entry and exit points.
With this simple check list you are using the first four elements of your list from your post. Flipping a coin is not recommended. One note on volume, CSCO has the most volume but it is far too slow to make profits using less than 2000 shares. There is no doubt you can make money with a widely held stock, but most traders opt for ones that move rather than ones with volume. The main purpose of volume is to allow you to trade large numbers of shares. If you're not trading large shares, then volume has less of an impact.
Others may have different methods and techniques, but this is what i use.
There is no such thing as the one best indicator to determine stock movement. There are many factors that determine the course of a stock. In fact the list in your post are all elements that together form a somewhat cohesive idea. When trading, this is the checklist that you must follow from my own experience.
1) determine your trading time frame, will it be intraday, several days or long term. Day trading is intraday.
2) pick a stock or several that have decent trading volume, between 500k to 1M at least. Also that they move in at least a point or two daily.
3) determine their 10 day, 30, and 5 day trend to see where you can enter.
4) finally, in the intraday trading, use stochatic indicators to determine entry and exit points.
With this simple check list you are using the first four elements of your list from your post. Flipping a coin is not recommended. One note on volume, CSCO has the most volume but it is far too slow to make profits using less than 2000 shares. There is no doubt you can make money with a widely held stock, but most traders opt for ones that move rather than ones with volume. The main purpose of volume is to allow you to trade large numbers of shares. If you're not trading large shares, then volume has less of an impact.
Others may have different methods and techniques, but this is what i use.
I would have to agree there is no one single best indicator for sure fire movement of a security. However, you can begin by stacking the odds in your favor. Breakouts from consolidation's and pullbacks are my two favorite's. I am a fan of historic volatility and use it extensively to locate area's that are wound up tightly. Volume and volatility are highly correlated. Seeing narrow range days (NR4-7's)with volume falling off is key. Furthermore, locating this type of setup in a sector that is experiencing positive rotation and is further supported by positive market dynamics helps your odds. I hope this helps.
-Hoyler
-Hoyler
Zarrar,
Thank you for the question, I'll try my best to answer it. There are 27 major indices available to the market participant. All have options contracts available on the underlying.
These area's are my starting point for a visual inspection of where the "smart money" is rotating into and out of. At the risk of sounding cliche, I'll say the following, volume precedes price and price movement without news is the cleaner play for the swing trader. Large players cannot take positions without leaving the foot print for all to see. People have memories and react the same way over and over again to the same scenario, herein lies another edge for the trader.
Institutions, Insurers, Hedge funds, and Market makers are all more technically driven than they would like us to believe. I like to see where the indices rests in regard to the 20/50/200 day moving averages - these are important to the big boys. Are they supportive or resistive to movement? Price consolidation's at or just above those averages are ripe for breakouts and subsequent pullbacks.
Have recent prices tightened up as they have neared resistance? Is a chart pattern developing? Relative strength, chart patterns, i.e.: bases/c&h's/pullbacks, bar patterns, i.e.: NR days/range expansion days/exhaustion days, volume, historical volatility contraction Vs expansion, oscillator pattern's and position's what is the forecast. The overall market dynamics i.e.: VIX/ ad line/ ticks/ trin/ premium. What does the next higher time frame say about the potential for an advance? All play a role in determining where and in what to begin a position. I hope this helps.
-Hoyler
below are the major sectors, you can break them down further with IBD or something similar, GL!
$BIX.X S&P Bank Index
$BKX.X PHLX Bank Index
$BTK.X AMEX Biotech Index
$CEX.X S&P Chemical Index
$CMR.X AMEX Morgan Stanley Consumer Index
$CYC.X AMEX Morgan Stanley Cyclical Index
$DOT.X The Street.Com Internet Index
$DRG.X AMEX Pharmaceutical Index
$FPP.X Forrest and Paper Products
$HCX.X S&P Health Care Index
$IIX.X Interactive Internet Index
$IUX.X S&P Insurance Index
$JPN.X AMEX Japan Index
$MXY.X Mexico Index
$OSX.X PHLX Oil Service
$PSE.X Pacific High Technology Index
$RLX.X S&P Retail Index
$SOX.X PHLX Semiconductor
$SPF.X S&P 40 Financials
$UTY.X PHLX Utility Index
$TRX.X S&P Transportation Sector
$XAL.X Airline Index
$XAU.X PHLX Gold/Silver Sector
$XBD.X AMEX Broker/Dealer Index
$XCI.X AMEX Computer Technology Index
$XOI.X AMEX Oil Index
$XTC.X AMEX Telecommunications Index
Thank you for the question, I'll try my best to answer it. There are 27 major indices available to the market participant. All have options contracts available on the underlying.
These area's are my starting point for a visual inspection of where the "smart money" is rotating into and out of. At the risk of sounding cliche, I'll say the following, volume precedes price and price movement without news is the cleaner play for the swing trader. Large players cannot take positions without leaving the foot print for all to see. People have memories and react the same way over and over again to the same scenario, herein lies another edge for the trader.
Institutions, Insurers, Hedge funds, and Market makers are all more technically driven than they would like us to believe. I like to see where the indices rests in regard to the 20/50/200 day moving averages - these are important to the big boys. Are they supportive or resistive to movement? Price consolidation's at or just above those averages are ripe for breakouts and subsequent pullbacks.
Have recent prices tightened up as they have neared resistance? Is a chart pattern developing? Relative strength, chart patterns, i.e.: bases/c&h's/pullbacks, bar patterns, i.e.: NR days/range expansion days/exhaustion days, volume, historical volatility contraction Vs expansion, oscillator pattern's and position's what is the forecast. The overall market dynamics i.e.: VIX/ ad line/ ticks/ trin/ premium. What does the next higher time frame say about the potential for an advance? All play a role in determining where and in what to begin a position. I hope this helps.
-Hoyler
below are the major sectors, you can break them down further with IBD or something similar, GL!
$BIX.X S&P Bank Index
$BKX.X PHLX Bank Index
$BTK.X AMEX Biotech Index
$CEX.X S&P Chemical Index
$CMR.X AMEX Morgan Stanley Consumer Index
$CYC.X AMEX Morgan Stanley Cyclical Index
$DOT.X The Street.Com Internet Index
$DRG.X AMEX Pharmaceutical Index
$FPP.X Forrest and Paper Products
$HCX.X S&P Health Care Index
$IIX.X Interactive Internet Index
$IUX.X S&P Insurance Index
$JPN.X AMEX Japan Index
$MXY.X Mexico Index
$OSX.X PHLX Oil Service
$PSE.X Pacific High Technology Index
$RLX.X S&P Retail Index
$SOX.X PHLX Semiconductor
$SPF.X S&P 40 Financials
$UTY.X PHLX Utility Index
$TRX.X S&P Transportation Sector
$XAL.X Airline Index
$XAU.X PHLX Gold/Silver Sector
$XBD.X AMEX Broker/Dealer Index
$XCI.X AMEX Computer Technology Index
$XOI.X AMEX Oil Index
$XTC.X AMEX Telecommunications Index
what is your time frame? if its short (minutes to hours) then I would recommend tape reading, then technical analysis (which is just tape reading + other stuff).
BTW, technical analysis encompasses 1-4 on your list.
And some would say #5
)
Nothing can compare with just watching a security and getting a 'feel' for it. I find it amazing how much insight I get by simply stalking. Each security is unique because each has a unique group of people trading/investing in it.
BTW, technical analysis encompasses 1-4 on your list.
And some would say #5
)Nothing can compare with just watching a security and getting a 'feel' for it. I find it amazing how much insight I get by simply stalking. Each security is unique because each has a unique group of people trading/investing in it.
I like to say betting on stocks is like betting on horses, ur never know the winner till it's too late.
I like to say the brokers and banks are like a voulchers and vampires they like to suck the blood out of every stock.
and they do like to jump long or short way long before u know about it.
some banker said: the reason he had a research dept"analyst"
is to make profit.
so imagine what they would do anything to make a buck here and there.
think about stocks selling at 1/2 hour before the market close, and then u got hit with profite warning after that and it got halted and opened 1/2 price.or stock buying 5 minutes bofore it get halted and then open double on merger or buy out or earning news.
I like to say that investment days are over and wall atreet now is like giant gambling casino for the fat cutomers.
larry flint can bet and make million dollar in a minute, and u bet and lose ur ass in a week
stocks nowaday have absloutley no fundamentals or basics and they bounce on rumers," let buy stock A for P/E of 1000 and short stock B with a P/E of 5.
I lost lot of money on ATT and LU and now I got no cconfident in any bankers, analyst, stock 'big cap or small cap' or wahtever.
PEACE
I like to say the brokers and banks are like a voulchers and vampires they like to suck the blood out of every stock.
and they do like to jump long or short way long before u know about it.
some banker said: the reason he had a research dept"analyst"
is to make profit.
so imagine what they would do anything to make a buck here and there.
think about stocks selling at 1/2 hour before the market close, and then u got hit with profite warning after that and it got halted and opened 1/2 price.or stock buying 5 minutes bofore it get halted and then open double on merger or buy out or earning news.
I like to say that investment days are over and wall atreet now is like giant gambling casino for the fat cutomers.
larry flint can bet and make million dollar in a minute, and u bet and lose ur ass in a week
stocks nowaday have absloutley no fundamentals or basics and they bounce on rumers," let buy stock A for P/E of 1000 and short stock B with a P/E of 5.
I lost lot of money on ATT and LU and now I got no cconfident in any bankers, analyst, stock 'big cap or small cap' or wahtever.
PEACE
Zarrar,
You are correct in your presumption. Ideally you are positioned to capitalize upon the anticipated follow through. When/If it all comes together and you are pulled in and mammoth volume follows in your direction, it is a rewarding feeling. What is that cash registar sound - cha-ching -
-Hoyler
You are correct in your presumption. Ideally you are positioned to capitalize upon the anticipated follow through. When/If it all comes together and you are pulled in and mammoth volume follows in your direction, it is a rewarding feeling. What is that cash registar sound - cha-ching -
-Hoyler