Those stocktwits seem to have a one-track mind. I was excited to see a new ticker at the top of their discussion list, because that’s how I pick the stock I feature in a totally unbiased way. For a long time they’ve been sticking with SKF, so I thought FAZ would be a nice change… but it’s just another freaking inverse finance ETF… only with more leverage. Oh well…
The simple stock system, made up of just a few eotpro indicators, picked a single entry on Financial Bear 3X (NYSE: FAZ), and not a bad one at all:
It did pull back on you before running, but even with the tightest of stops you’d still be fine, as it didn’t even penetrate the low of the entry candle. A pretty smooth ride up after that. Sweet!
Incidentally, there is a table of volume bar settings that I use for these. I take the 30-day avg volume, and use the overview settings for all these stock charts. If you don’t want to bother looking it up, all you have to do is take the 30-day avg volume, divide it by 100, and pick the next highest fib number. Let’s take today’s stock as an example. FAZ is so new it hasn’t even been trading 30 days, so I just looked at the last couple days of volume… about 3 million shares or so. 3,000,000 / 100 = 30,000. So, I went with the next highest fib number of 46,368 share bars. Couldn’t be easier!
The indicator picks the entries mechanically, and I use the same settings on all stocks, and I always show you the whole day on the featured stock. So, no funny-business or cherry-picking. Just sweet, sweet profits.
Hi Richard,
Is there an issue of hindisght with the top stock selection from twits?
At what point was FAZ highest rated by mentions? If it’s EOD then there is an issue of lookback bias to be careful of, sorry if you have covered this point before.
Cheers,
Andrew.
Yeah, it’s crossed my mind, but I’m not sure it’s a factor, and so far am too lazy to try to correct for it. Some reasons include:
1) they pick the ultrashort financials practically every day, so most days I’m also doing the pick from _yesterday’s eod_.
2) When a reader selects a stock, I pick it. When they don’t, I need an easy method to make a choice so that people know I didn’t try charts until one looked good.
3) I wouldn’t just pick a stock at random, because in any realistic scenario, I would advocate trading a stock with news and premarket activity. I’ve hung out on boards like stocktwits before, and those are the very stocks that tend to get mentioned.
4) The posts generate blog traffic via google searches. People will search for stocks that folks at large are talking about. So, it does the blog good to write about stocks that people talked about.
… so I considered it a decent choice. If they always picked the one stock out there that made some monster move, then there’d be a bigger concern. But they often just pick a thick ETF or a big name like AAPL or GM. So, I haven’t seen any cause for concern, have you? I am open to suggestions as to how to make the methodology better, without causing me too much extra work.
Hi Richard,
Was hoping you could feature the Q’s (QQQQ) today if you have the time with your simple-stock-system. If you can, thanks!
Have a good weekend.
-todd
I’m travelling this weekend, but on Monday I’ll show you friday’s Q’s.
What’s up Richard? At some point I’ll get around to re-opening a Tradestation account. And at that point I will most certainly look to add your eotpro indicators. You really do make things look so simple.
Hey oonr7, if you have a datafeed that will power ninja, then you could also check out the indicators on that platform, too. And before people commit, I recommend they check out the live room for our 2-week trial. That way, you can get familiar with the indicators and ask questions… see how they fit in with your style.