New Members: Be sure to confirm your email address by clicking on the link that was sent to your email inbox. You will not be able to post messages until you click that link.
I'm a COMPLETE beginner and I was wondering what is the best way to scan for charts with pull back potential. I don't know how to write my own scans(yet) are there any predefined scans I could use on a site like stockcharts.com or finviz.com also with the way the market has been goin lately should I be looking for Longs or shorts? I have been looking for Longs but don't really see the kinds of charts I'm looking for (which would be a stock in an uptrend on both the Weekly and daily charts that are falling on the right edge of the dailies) I thought about jus giving the whole idea of trading up last night but I really think my ADHD is kicking in and I'm jus making this to hard in my head..I don't want to throw in the towel its one of the VERY FEW things I'm interested in learning
It does take a while to learn to use a site like Stockcharts, so you shouldn't expect to just jump in and start scanning and trading right away. I don't think anyone completely new does that. Even someone with trading experience would need to take time to learn how to use all the tools here. On the other hand, everyone learns differently, so if you are one who needs to learn by doing, and can afford to lose money for a while as you learn, then you might start actually trading sooner.
I would suggest a few things. Watch the videos on scanning in chart school - and as many of the others as you want. Here's the link:
Then, look at some charts - put different different indicators and overlays on them to see what they look like when you see a trade set up you like - like the dip in an up trend you mentioned. You might want to try Slow Stochastics, or maybe two moving averages like 21 and 5. Or pick some others from Chart School after you read up on them. Look at A LOT of charts. Maybe start with the SPDR etfs - XLE, XLB, XLI, XLY, XLP, XLV, XLF, XLK and XLU. When you find one or a few that are trading the way you like, then look at individual stocks that belong to the same sector(s). For instance, XLE is the Energy Sector and XOM (ExxonMobil) is a stock in that sector. Look for stocks that look like they might be doing the same thing as the etf - that is, the same indicators or overlays are doing the same thing - or just did, or are about to. Those stocks have a better chance of being a better trade.
When you find an indicator or overlay - or maybe a combination - that you would like to take a chance on, then it's time to start building a scan, and we can help you with that.
I know it seems like a long haul, but if you give yourself a chance, make a plan to learn and then set aside some time on a schedule of your own choosing, you can chip away at it until you see real progress. If it's not for you, that's fine, too, but give it a chance before you decide. Pop your questions up here as you go along. Somebody will answer.
Choose an indicator you want to work with and we'll write something. Doesn't matter which one - have to start somewhere.
Note: the lines that begin with "//" are comments - the scan engine doesn't see them; you can delete them if they clutter things up.
// BEGIN SCAN
// choose stocks to look at
// easy way is to choose from Indexes and ETFs drop down
// scan writing note: the first line NEVER begins with "and"
[group is sp600]
// find stocks in a long term up trend
// 200 day MA is higher than a month ago
// scan writing note: every line after the first MUST begin with "and"
// or "or"
and [sma(200, close) > 21 days ago sma(200,close)]
// the 50 MA is above the 200 MA
// scan writing note: sma( ) is a "function" -
// you can tell its a function because
// it begins with some letters and includes stuff between parentheses ( )
// the stuff between the parentheses is called the parameters -
// there are usually one, or two or three parameters
// a function is a built in operation that does a complex calculation for you
// this one calculates a moving average
and [sma(50, close) > sma(200,close)]
// this looks for the indicator signal
// %D is the moving average of %K (read the chart school article on Stochastic)
// the "x" says, crosses above
// so the signal is %D (red line on the chart) crosses above the 20 line
and [Slow Stoch %D(14,3) x 20]
// END SCAN
You can edit [group is sp600] to sp400 or sp500 or anything else you want
You can edit 14, 3 - maybe try 21, 5
You can edit the 20 - maybe move it up to 25 or 30
You can run this scan for days in the past by selecting a date from the drop down calendar above the advanced scan window.
When you get the results put them in a list and format the charts with the SCC default chart style (there are videos about chart styles and lists) and change the MACD indicator to the Slow Stochastic indicator. If you change the 14,3 to 21, 5 in the scan, you also have to change the parameters for that indicator on the chart.
Then review the results - make the chart maybe six months or a year long. Find all the trades that Slow Stochastics signalled - where the red D line crossed above the 20. It will give you an idea of how often the signal "works".
Note: if you select a date in the past for your scan, your chart will still come up dated for today. If you want to see how the chart looked on the scan date, you have to reset the dates using "Select Start/End date" under Chart Attributes - Range on the chart workbench. Also check out the tool next to "Extra bars". If you click on the right end arrow, it advances the chart one bar at a time, so you can walk through a trade.
Then you can try to figure out what's the difference between the winning and losing trades and is there another indicator or overlay or condition (like above or below an MA, or something else) that will filter out the bad trades.
It's a lot of detective work, but if you like it, it's fun.
thank you in advanced,
I think you want to think about building the scan backwards from the way you are saying it -
write a line for today's close is greater than one day ago close - and test it until it works
then, add a line for today's close is less than the 10 day ema of closes - and test both until they work.
Then to get a recent high price - this is harder - a line for the max price, meaning the highest high, within some number of days ago (you decide) is greater than the max price, again, the highest high, beginning of some number of days before the recent high and looking back some number of days - so - something like:
and [ max(?, high) > ? days ago max(?, high)]
or another way might be
and [max(?, Upper Price Chan(?)) > ? days ago Upper Price Chan(?)]
You have to fill in the ? with numbers that you think might work from looking at your charts. It's hard work and you have to do a lot of thinking, but that's how it gets done.
and [10 days ago Elder Bar Green is true]
Another way would be to check whether a moving average of some length is higher (for an up trend) than some number of days ago - maybe 10 days for the 50 day average or 20 days for the 200 day average.
select ema twice from the Technical Indicators drop down
edit to put both emas on the same line with a less than operator between them
edit the first ema so it says 13 and close
edit the second ema so it says 26 and close
then, for both, put "weekly" in front of "ema" and also in front of "close"
And for the daily emas, almost the same thing
select ema twice from the technical indicators drop down
edit to both on one line with a greater than operator between them
edit the first ema for 13 and close
edit the second ema for 26 and close
you don't need to modify with "daily" because the scan engine assumes you mean daily unless you put something else in front of it (like "weekly" as we did above).
If you get stuck, post what you have.
You did a great job to narrow down just exactly what you want for indicators and how they should be in relation to each other. Once you figure out specifics that way, its much easier to write the scan. Basically, when you write a scan, it's just describing exactly what you see on your chart, as you did here in plain english, but in scan language. Congrats!
We'll assume you have other lines in the scan that look for stocks in a longer term down trend.
So first, you want to test that the short ema has been rising. You can do that by comparing the current value of the ema to its value some number of days ago - let's say 5. Again, you could experiment with different numbers.
and [ema(5,close) > 5 days ago ema(5,close)]
Then you want to test that the short ema has turned down - or looks like it wants to turn down.
and [ema(5,close) < 2 days ago ema(5,close)]
These conditions are only meant to find stocks where buyers have shown some weakness that might lead to more weakness. You wouldn't necessarily enter right away. Sometimes stocks do go straight down once they turn, but other times there is a reaction back up, sometimes to a new higher high (for that rally), sometimes short of higher high.
thanks in advanced,
If you identify some conditions you like, and write it out in (very specific) ordinary language, I'll help you put it into scan language. Also, maybe let's start a new thread. This one is getting very long.