I prefer to trade one week or even longer trends rather than day trade or very short term trades of one or two days. I designed a filter that has the following features:
1. Weekly stochastics indicates a positive change in an up trending stock but the stock on a weekly basis has taken a dip or is moving away from flatness.
2. Fast stochastics is in lower range so one is not catching the top of a change
3. Daily rsi supports an up trending stock
4. Slope of close also favors uptrend
I have run this filter in several different types of markets, up, down and flat. When the market is near a top or flattening the filter gives very few or no returns. When the market or stock is uptrending one gets returns and a reasonable number. The weekly returns are very nice. The filter is not great for much beyond one or two weeks. Once a week has been reached either sell or set a trailing stop loss. I like it because it keeps you out when the market is indicating either a short or long term top or going flat.
Here is the filter:
I post it so others can review it and perhaps suggest improvements.
Something strange is happening. If I check the filter given in brackets I get a different result than if I use the filter in the set of My Filters.
The filter listed in my filter for July 3 gives no returns whereas the one posted above in bracket gives me 12 matches.
Here is the filter I copied directly from My Filter:
Show stocks where weekly Fast Stochastic(5,3) Fast %K crossed above weekly Fast Stochastic(5,3) Slow %D within the last 1 day and Fast Stochastic(5,3) Fast %K is below 40 and rsi(14) is above 50 and 3 day slope of the close is above 0
As I indicated I have been trying to design filters that work on a weekly basis. This is one of my first that seems to work well within a week. I have to admit that I have not yet traded it since I just developed it.
I would trade it on the open of the next day. There are all sorts of real trading issue to consider and I have not researched them yet.
I have metastock and will be trying to program it to get a better idea of the close vs open issue. I am not really sure how stockfetcher trades these filters. Thus, I am still a little cautious with the information for this site.
You might be interested in my new note on a filter to trade short, using essentially the same logic but reversed.
Here is another weekly filter for one week trading. I think it may be better than the previous one
To convince yourself that it does fairly well, even in down markets, start with Wednesday May 15, 2002 in a performance test starting date (around 288 days back as of this date, July 15th) and then start moving forward using the one day forward button. Do this one day at a time for many weeks. It actually shows many positive days in very negative markets; not every time, so money management is necessary, but in most it does well. It will also do well in bull markets, again not perfectly. Many times it will choose only one or two stocks. So, it will be a win or loss but easily followed.
Comments or suggestions always appreciated. I am not convinced it still has the perfect tweak. I have not varied parameters for volume rate of change or stochastics.
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