martha stokes article

lynden

can anyone provide a scan per the criteria in Martha stokes article with the chart (smallest box for consecutive candles) representing a tight formation? Thanks in advance
http://stockcharts.com/articles/tac/2016/05/martha-stokes-decoding-candlestick-charts-with-doji-example.html

markd

Pretty hard to do this because because no two patterns will be exactly alike.

You might try something with MAs and Price Channels, like 63 MA rising, 21 day mid channel above the 63 MA and maybe 10 day Lower price channel above 21 day mid channel.

That much would tell you prices are generally rising (above 63 MA) and in the upper half of the recent range (10 day lower price channel above the 21 day mid channel).

Then you would need something to insure prices have been below a recent high, so maybe 63 day Upper price channel equals 63 day Upper price channel from some number of weeks ago, maybe 30 or 45 days (upper channel has been flat).

That tells you prices have been trading below a six or seven week high.

But, these condition would probably fit only a narrow window in the pattern and would not provide an entry signal, only that conditions are building toward an entry - maybe.

Maybe others have some ideas with other indicators or overlays. You might want to do something with a declining ATR.

You wouldn't expect to get hits very often, and similar situations that don't quite fit these conditions would get by without getting picked up.

lynden

Thanks for the reply i was just trying to keep it simple like maybe consecutive tight candles

markd

I looked at Martha's chart with the default SC style and noticed the MACD Hist values were very low.

So this uses PPO Hist instead to get consistent Hist values.

// begin tight range scan
[type = stock] AND [Daily SMA(20,Daily Volume) > 40000]

// find very small Hist values over the last two weeks

and [max(10, PPO Hist(12,26,9)) < .15]
and [min(10, PPO Hist(12,26,9)) > -.15]

// end scan

I got 330 or so hits. I checked a few and they were more or less in a range. Hist only says the MAs are close together, which means the closes are close together. It doesn't actually say anything about the range or direction, so some hits could be tight closes with an upward or downward tilt.

You can change the max and min lengths and the Hist limits to suit your preference.

lynden

Thank you Markd