Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (4) | Ignore Thread Prev Thread | Prev | Next | Next Thread
Author: tm2001 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 80  
Subject: Looking for bases in all the wrong places Date: 2/23/2001 8:07 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 3
One of the things we all seem to try to do in TC2000 is to write formulas to look for bases. I don't know how many hours I've spent (and wasted, other than learning some of the details of how to use the product) trying to do this. I've come to the conclusion that it really isn't feasible to write a formula to find a CWH or rectangle base. However, finding a flat base is another matter. This post contains a couple of tips if you're interested in flat consolidation bases. First, the formula below will find a base no deeper than 10% and which is at least 20 days long:

(MAXH20-MINL20)/MAXH20 <= .1

You can change the formula to suit your own needs, either making the length requirements longer/shorter or making the depth bigger or smaller.

Second, you could add a volume scan to this formula which would look for an average volume over the duration of the base which is less than the average volume over the preceding, say 50 days, by using:

AVGV20 < AVGV50.21

Put these together and you might have something to start with, namely, a chart with a flat base which meets your length and depth requirements and with declining volume.

Finally, when scanning for flat bases, I've found it helpful to change the scaling from arithmetic to a custom logarithmic scale. You can do this by using the Indicator Tab / Scaling / Custom Scaling sequence and then selecting your scaling interval. If you use this scaling set-up with a 10% value, then your chart will have a 10% price difference between the horizontal grid lines. That way, if you're looking for bases which are approximately 10% deep (as in this example), it's easier to see them.

I like to use the formulas along with the custom scaling when I'm prospecting for flat bases. It just makes it easier to spot them. Then, prior to setting a buy point, I'll change the scaling back to arithmetic.

Anyone else tried this or something similar?

-tradermike
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (4) | Ignore Thread Prev Thread | Prev | Next | Next Thread

Announcements

Foolanthropy 2014!
By working with young, first-time moms, Nurse-Family Partnership is able to truly change lives – for generations to come.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Post of the Day:
Dividend Growth Investing

Good Time for Dividend Champions?
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement