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One more question for whoever, is there any scan that I can use to find the bottom on stocks? I have used some of the predefinded ones but they are either early or late, was just wondering if anyone has found one that is a wk or so early? tia

Best Answer

  • markdmarkd ✭✭✭
    edited March 17 Accepted Answer
    If any indicator is ever right on time in signalling a bottom it is sheer coincidence. Most indicators use static, unchanging parameters but the prices (and/or volume) they use to calculate signals vary their behavior over time. When prices go up and down with some kind of regularity that is in tune with the indicator's parameters, you get good signals. But often prices stretch out their moves over a longer period of time than the parameters can capture, or else compress their moves into a very short period so the signal is late or maybe doesn't even occur - even though the eye can pick out a bottom in retrospect.

    That said, I think the indicator that might be easiest to scan for in advance of a signal is your choice of stochastics -fast, slow or full.

    There are several ways to use them (see the link below). I think the original method was, in an up trend, wait for %K to cross below 20 and then buy on a cross back above 20.

    In any case, to get an advance warning of a possible (emphasis on possible) bottom, you would scan for K crossing below 20. It can work at the end of a down trend, but its a little more likely to work out in an up trend. You could start by applying the different versions of Stochastics to your chart style and maybe play with the parameter to see how the indicator works.

    Here's the chart school article.


    https://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:stochastic_oscillator_fast_slow_and_full


    To see one variation on how stochastics can be used, check out Joanne Klein's public chart list "Above the Green Line".

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