Monday, September 16, 2002 12:10:10 PM
Tom Carr's Befriend-the-Trend Moving-Average-Crossover (BTT-MAX) Trading System from SI
I've had 3 PM's tonight asking me to detail clearly the BTTT-MAX "system". Happy to do so, in the hope that others find it profitable:
a) most important: find stocks with high volatility as seen on hourly charts. We have a list of stocks contributed by all the hard-working regulars of this thread in the main header, but there are always others to be found. When I first started using the system, I screened for stocks with ADV over 500k, beta of around 2, and a price between $20 and $80. There are other screens that are also helpful. Most important, the stock must make consistent swings between support and resistance, without too many whips and opening gaps. It is also helpful if the stock is in a longer term up- or down-trend.
b) set up your charting system with a 5EMA and 8SMA
c) with the 5EMA as the trigger, enter long or short and reverse your position at each new signal.
d) and I would recommend only checking the charts every hour (perhaps more frequently in the busy morning and closing hours).
#reply-14304391
***************************
ADDENDUM:
It is also important that volatility be measured in terms of price range. Stocks can be ranked by using the following formula:
(3-wk high) - (3 week low)/current price
Select the top 2 or 3 and focus on those. One can recalculate the list every 2 or 3 weeks if necessary.
#reply-14304412
***************************
ADDENDUM II:
Recently we have added Stochastics set at 14 and OBV to the charting setup. This has the advantage of warning of possible reversals in trend before the MAX signals. But be warned (as I learned this week with SNDK) that a Stoch. signal is not in itself reason enough to close or reverse a position, unless other indicators (trendline analysis, e.g.) indicate one should do so.
#reply-14304412
***************************
ADDENDUM III:
A rule I've been using that seems to work well: do not reverse or close a position, even on a MAX signal, if the candle color is against it. E.g., if MAX signals short you are long), but the candle indicates clearly that buyers are still in charge of the market, hold off until it changes. This is not a contrarian system. We are not trying to catch exact reversal points. We only want to join the trend after it has already started, and get out after it finishes.
#reply-14304435
****************************
BTT-MAX Thread Member "TraderWithNoName" has a website about BTT-MAX trading at http://home.attbi.com/~trader9/TWNN/index.html
****************************
There is a BTT-MAX online chat @ http://www.othernet.org/chat/chat.php3
Enter "#BTT-MAX-Traders" as the "Channel Name"
****************************
There is also a BTT-MAX short-term options trading thread at #thread-
(:
Most recent Charts @ MDA Thread #board-1320
My Trading Stuff #board-1220
PPT Archive #board-1280
Charting Experiments #board-1263
I've had 3 PM's tonight asking me to detail clearly the BTTT-MAX "system". Happy to do so, in the hope that others find it profitable:
a) most important: find stocks with high volatility as seen on hourly charts. We have a list of stocks contributed by all the hard-working regulars of this thread in the main header, but there are always others to be found. When I first started using the system, I screened for stocks with ADV over 500k, beta of around 2, and a price between $20 and $80. There are other screens that are also helpful. Most important, the stock must make consistent swings between support and resistance, without too many whips and opening gaps. It is also helpful if the stock is in a longer term up- or down-trend.
b) set up your charting system with a 5EMA and 8SMA
c) with the 5EMA as the trigger, enter long or short and reverse your position at each new signal.
d) and I would recommend only checking the charts every hour (perhaps more frequently in the busy morning and closing hours).
#reply-14304391
***************************
ADDENDUM:
It is also important that volatility be measured in terms of price range. Stocks can be ranked by using the following formula:
(3-wk high) - (3 week low)/current price
Select the top 2 or 3 and focus on those. One can recalculate the list every 2 or 3 weeks if necessary.
#reply-14304412
***************************
ADDENDUM II:
Recently we have added Stochastics set at 14 and OBV to the charting setup. This has the advantage of warning of possible reversals in trend before the MAX signals. But be warned (as I learned this week with SNDK) that a Stoch. signal is not in itself reason enough to close or reverse a position, unless other indicators (trendline analysis, e.g.) indicate one should do so.
#reply-14304412
***************************
ADDENDUM III:
A rule I've been using that seems to work well: do not reverse or close a position, even on a MAX signal, if the candle color is against it. E.g., if MAX signals short you are long), but the candle indicates clearly that buyers are still in charge of the market, hold off until it changes. This is not a contrarian system. We are not trying to catch exact reversal points. We only want to join the trend after it has already started, and get out after it finishes.
#reply-14304435
****************************
BTT-MAX Thread Member "TraderWithNoName" has a website about BTT-MAX trading at http://home.attbi.com/~trader9/TWNN/index.html
****************************
There is a BTT-MAX online chat @ http://www.othernet.org/chat/chat.php3
Enter "#BTT-MAX-Traders" as the "Channel Name"
****************************
There is also a BTT-MAX short-term options trading thread at #thread-
(:
Most recent Charts @ MDA Thread #board-1320
My Trading Stuff #board-1220
PPT Archive #board-1280
Charting Experiments #board-1263
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