Volatility, volatility, volatility!!!

karutunian

OK, looking for a *simple way to scan for volatile stocks with slow stochastic 14,3,3 below 20. Price of stocks should be between $10-$20.

I think I'm good on how to get the stochastic below 20 stuff. Just not sure how to scan for the most volatile? I'm hoping to find equities that will give me at least 4-5 signals per year on the daily chart with stochastic below 20...with the greatest potential for % price change to the upside.

Hope this makes sense!

Thanks for any help.

Kevo

Hello karutunian,

The best way to measure volatility for individual stocks is to use the Standard Deviation indicator, Average True Range indicator, Bollinger Band overlay, and Keltner Channel overlay.

Here is some links to similar posts that have scans in them:

1. Scanning for volatile stocks

2. Volatility contraction scans?

karutunian

Thanks Kevo...will study what you've provided!

Kevo

Just to clarify when you do your study...

Many volatility based scans look for volatility contraction. This is different than looking for "most volatile" as stated in your question.

karutunian

Gotcha. Here's what I'm trying to accomplish...maybe you can suggest how I could go about my scans?! I'm using stochastic and rsi as my signal with macd histogram, money flow, accumulation/distribution and volume to help confirm the signal.
I'm trying to pick positions with the greatest amount of "meat on the bone"...wide swings from bottoming/oversold on stochastic/rsi to overbought conditions.

I do have price limitations with these trades. Looking for a range of $10-$20 per share. Would also prefer to stay clear of thinly traded positions. Individual equities only...no etf's or closed/open end funds. Any sector is on the table.

Thanks for any tips/suggestions you may wish to share!

Kevo

I am going to assume that 'meat on the bone' means volatility. With all the new information, it does make this more complex. We can best help you with specific questions.

If you are looking mainly for OB/OS, then consider stocks that are under consolidation, or in a trading range. You can use ADX to help determine that, or just examine chart patterns.

There are several TA metrics to examine and there are different ways of going about it. Here are some, but not all: Trend, Momentum, Overbought/Oversold, Support/Resistance, Chart Patterns, Volume, Price Relative, Relative Strength, Accum/Dist, Volatility, etc.

karutunian

Excellent info.

Thanks Kevo. I'll try different ways of using the metrics you've mentioned above. I'm beginning to see how each metric can be used to glean such info.