Mid range rule

[sanefellow_213]

I'm a relatively new member of this forum, and would like to share ... some of the trading strategy.. i read recently.. and hence found it .. interesting hence I would like to share it with all of you.

And would appreciate your feedbacks/comments also.

It works on the Mid range premise i.e.

Take the high and the low of a stock and then divide it by 2.. hence getting a mid numeric value. If you stock closes above this level then signs of it being bullish the next mrng is quite possible .. and below this level.. shows waning momentum in the stock.

This method combined with the overall index using the same strategy.. in combination with the stock can deliver good results with strict SL.


+ =above the mid range , - = below the mid range



Markets Stock

+ +

Implication:
Micro and macro momentum are upward bound, providing a stable market is present .The stock will most likely gap up the following morning and may continue upward


Markets Stock
+ -

Implication:

Macromomentum is ending positive, but your stockk is not, this si a sign your stock is not participating. Its weakness may continue the next day. I t has broken from the macromomentum and hence becomes unpredicable.


Markets Stock
- +


Implication:

your stock is showing more strength than the macromomentum. The stock is not participationg, if the macromomentum continues downward your stock may be pulled down the following day, unless it is an unpredicatble exception.


Markets Stock
- -

Implication:

Both Micro and Macro momentum are declinign providing the markt stays in that trend. Your stock may gap nuetral to negative the following morning and continue downward..


Regards,

Sanefellow_213

 

[murthymsr]

I feel this may give sometimes erroneous signals, particularly when bulk buy/sell orders are executed.

I feel the short term (3 to 5 days) moving averages of high, low and close may be used instead of just the last trading day to give a slightly better signals.

Alternatively, instead average of high and low prices of the day, average day's price (total traded value / Total traded volume) may be compared to closing price to get some idea of the market perception of the share.

Unfortunately the market dynamics is not that simple.

Happy and fruitful trading.

murthymsr

 

[biyasc]

good post man.

 

[Prabhjeet]

If it was this easy to make money in market then my dear friend everyone would have abondened going to their jobs and would just start their computer at 3.30pm with cold drink in his hand and waffers in his pocket, and just check the closing price at the end of day. If you wanna check for yourself than just notice few stocks for a week and you will know this is a crap theory.

Trading is a full time job, invest good time in research and u will have good returns. By the way this forum is a good medium to gain a lot of knowledge


REGARDS