Can You Scan To Find Stocks With Improving Slow Stochastics?

SCAlchemist

Can you scan to find stocks in which the Slow Stochastic (14,3) indicator is increasing?

markd

You could compare the current period value of %K (or %D) to the value of some past period value of %K (or %D). The current value should be greater i.e. slow stoch %K > x days ago slow stoch %K.

You would have to experiment with the length of the interval (number of periods) between two values to see what value yields the best results over the most stocks.

lpmoran

I'll save you some time, the scan below uses Full Stochastics (21.8.5). The numbers are from a friend that did very extensive research on "what works" with the Stochastics indicator. I named this scan (Market Timing Scan) because it has a lot of results when the market turns (go back to the week of Nov. 2016) and run this scan all week to see how it works.

[[type = stock]
and [close >= 5]
and [yesterdays close < yesterdays sma (50, daily close)]
and [exchange is NASDAQ] or [exchange is NYSE]]
and [yesterday's Full Stoch %K (21,8,5) < 35.0]
and [yesterday's Full Stoch %D (21,8,5) < 35.0]
and [today's Full Stoch %K (21,8,5) x today's Full Stoch %D (21,8,5)]
rank by SCTR

markd

A couple of things to note about running this scan with a back date.

If you use "rank by SCTR", your results will display in the order of TODAY's SCTR value, NOT the SCTR value as of the scan date. The better performers for the SCTR time frame will appear at the top of the list. These MAY or MAY NOT be the same as the best performers since the scan date, which is when you would have entered your trade.

To get results ordered by the best per cent gain since the scan date, use "rank by PctChange(x, close)". The value of "x" should be the number of trading days between today and the scan date, which you can get from the calendar tool when you select your past scan date.

If you examine the charts at the top of the list from this ranking, it may give you some ideas of how to select the best charts from 100+ results this scan seems to return pretty consistently. It will also give you an idea of how many gained vs. how many lost from the scan date to today. However, you have to look at the charts to see if the gainers had a draw down, or if the losers were winners at some point.

(note to lpmoran - since nearly the entire market turned up in Nov 2016, it may not have been the particulars of this scan that were responsible for the large number of winners - any scan that looked for bullish events probably would have had similar results, I think. That's not to say this is not a good scan - I think it could be - but that week by itself is not proof.)

If you want to see the results ordered by the scan date SCTR, use "rank by [0 days ago SCTR]".

To see the scan date SCTR value on each chart, add the "SCTR Line" indicator to your research chart style and set the end date of the chart to the scan date, using the select start/end option under "range".

(Note: when you are researching, you should always look at winning and losing charts AS OF THE SCAN DATE - not today's date. Charts can look very different even just a month later. If you want to recognize a good trade in real time, you have to see the charts as they looked when you would have entered your theoretical successful trades.)

lmkwin

Excellent points for all scan writers to remember on markd's response.