Hello friends,
Sorry for not posting replies to your queries. Was a little tied up with meetings and so on.... You know all the stuff one has to do to make for a living!
I have come across quite some posts where friends are asking about the SOT indicator. I thought I'll share it with all.
Introduction:
The "Speed Of Trend"(SOT) indicator is a mechanism (not an index or a true indicator) to find the speed of the momentum of a stock.
What is the need?
Once a scrip is in a trend one need to know the targets for the scrip.
Measure
The SOT tries to measure the RSI's Overbought and/or Oversold signal on the time scale.
How it Works?
Once a scrip starts trending, meaning it takes a specific direction, I measures the speed at which the scrip is trending.
I calculate the percentage difference of todays close to that of the yesterdays close.
Then a 4days average of this speed is derived, which I term as the "Speed Of Trend"(SOT).
Once I have the SOT, I calculate the future closing of the stock on the current SOT%.
Along-side the future closing of the stock the future RSI is also calculated.
At one point in time, the RSI would become overbought or oversold, depending the direction of the scrip.
This future closing of the stock is considered as the target.
Note:
The SOT is a lagging indicator and hence the targets will shift along with the actual closing of the stock.
Any queries are welcome.
MANOJ
Sorry for not posting replies to your queries. Was a little tied up with meetings and so on.... You know all the stuff one has to do to make for a living!
I have come across quite some posts where friends are asking about the SOT indicator. I thought I'll share it with all.
Introduction:
The "Speed Of Trend"(SOT) indicator is a mechanism (not an index or a true indicator) to find the speed of the momentum of a stock.
What is the need?
Once a scrip is in a trend one need to know the targets for the scrip.
Measure
The SOT tries to measure the RSI's Overbought and/or Oversold signal on the time scale.
How it Works?
Once a scrip starts trending, meaning it takes a specific direction, I measures the speed at which the scrip is trending.
I calculate the percentage difference of todays close to that of the yesterdays close.
Then a 4days average of this speed is derived, which I term as the "Speed Of Trend"(SOT).
Once I have the SOT, I calculate the future closing of the stock on the current SOT%.
Along-side the future closing of the stock the future RSI is also calculated.
At one point in time, the RSI would become overbought or oversold, depending the direction of the scrip.
This future closing of the stock is considered as the target.
Note:
The SOT is a lagging indicator and hence the targets will shift along with the actual closing of the stock.
Any queries are welcome.
MANOJ