RE: [EquisMetaStock Group] Low Volatility Stocks...RSI, MetaStock Email Archive

Lee,

The blue line, in the upper frame on the chart, is what I think is your RSI....is this similar or matching to your formula? Keep in mind, divergence is a very nasty trap and can only be applied randomly as it occurs. Divergence equals subjectivity. How much does an issue diverge before you can safely time yourself into a trade (a little divergence, a little more divergence, or ad nausem divergence)? Many educators teach divergence with certain momentum oscillators (RSI, CCI, etc.). But, none of them ever define how much is the right amount of divergence. I'll stick with a faster, more reliable and profitable StoRSI.

Your thoughts?

Steve

--- On Wed, 6/25/08, Lee Lucas <leeontherun@hotmail.com> wrote:

From: Lee Lucas <leeontherun@hotmail.com>
Subject: RE: [EquisMetaStock Group] Low Volatility Stocks...RSI
To: equismetastock@yahoogroups.com
Date: Wednesday, June 25, 2008, 5:18 PM

Hey Preston,

The thing I like about RSI compared to most other indicators is that other indicators tend to be lagging indicators where as an RSI can show a slowing or change in direction earlier than the price shows.

In combination I have also made a moving average of an RSI i.e. Mov(RSI(C,14) ,40,E) and looked for cross overs. This can cut out a lot of noise. Works similar to a MACD I suppose.

Further more Divergence which has been quoted as being the most robust and secure oportunity to take a trade uses RSI or MACD. For those who don't know of Divergence - this is when price continues in it's direction while the other indicators (RSI or MACD) have already turned to go back. The assumption is that price will then turn back to keep up with the indicator.

Lee.

To: equismetastock@ yahoogroups. com
From: no_reply@xxxxxxxxxx s.com
Date: Wed, 25 Jun 2008 14:27:21 +0000
Subject: Re: [EquisMetaStock Group] Low Volatility Stocks...RSI

Lee,

I would love to hear more about how you are using the RSI and ATR.

Also wondering if you have read Baeyens book on the RSI?

Preston

--- In equismetastock@ yahoogroups. com, Lee Lucas <leeontherun@ ...>
wrote:
>
>
> It may be much easier to understand and see on a chart if you can
ship the backtest formula.
>
> I play alot with RSI and ATR
>
> Lee.
>
>
> To: equismetastock@ ...: andysmith_999@ ...: Tue, 24 Jun 2008
03:55:13 +0000Subject: [EquisMetaStock Group] Low Volatility Stocks
>
>
>
>
> I've been experimenting with this methodology: Every weekend I use a
screen to get stocks with certain fundamentals( based on P/S, P/E,
etc). Then I rank the list by 13 and 26 weekrelative strength and
discard any stocks that are not near the top onboth lists. This
leaves me around 20 stocks per week. Then, I look at the 20 charts to
see which charts have nice, smooth,up trends. I each chart is
displayed:-- ATR(10), this is used to calculate position size-- ATR
(10)/Close, this is used to get a sense of volatility-- ATR(10)/ATR
(50), this is used to get a sense of "is the stock morevolatile than
usual"The ATR(10)/Close usually works out to be around 3.5% to 5.5%.
Here'sthe part I'm still grappling with: I ignore any stocks above
4.5% sothat I end up with the smoother, tighter up trends. Please
share anythoughts on this.PS. I owe much of this to Roy's newsletter
and Super's posts over thelast few years.
>
>

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