The Stockradar Truth Test
Don’t listen to what they say, watch what they do.
As with stocks:
Don’t listen to what anyone says, watch what the price does.
The Stockradar Truth Test
A simple step-by-step process that focuses on identifying compelling trending qualities
that offer the best prospects for sustained price movement.
- Objective: Momentum, capture trend swing higher.
- Price Horizon: Weekly data, weekly signals
- Data Set: ASX/200
- Trigger: Price Setups
a. Trend Reversal (defined)
b. New High (defined)
For definitions see Stockradar – About – Stockradar Trading Strategy
- Further Filtering. To form a balanced view using established sentiment indicators. Stockradar’s Trend Intensity Rating Indicator is used. This is one more step in the process of creating an odds-based argument.
Stockradar Trend Intensity Indicator definition: For definitions see – About – Trend Intensity Indicator
Components
a. Trend – price direction
b. Volume – participation
c. Moving Average – probabilities
d. Momentum – acceleration/power
Simple yes/no outcomes with degrees of strength. Gauges strength on a -10/+10 basis
- Result: a. Trend Confirmed. b. No Trend c. On Watch
- Trading Actions if triggered. Buy with a stop. Weekly stop monitoring
If these conditions are met, we have satisfied the requirements for an odds based statistical argument that the price is likely to be higher next week than it is this week. As this is an odds-based argument, not a guarantee, stocks not performing are risk managed out at a predetermined maximum loss of 15%.
The evolution of this trade plan format is based on what we already know. i.e. if a qualified trend in prices develops, we can follow it with the known expectation that it will continue for a period. Trend following is exactly that, once a trend in prices develops, we follow it. Some exceed, some don’t, the art is to capture the ones that do, and weed out the ones that don’t.
This process provides a soundly based Voice of Reason detached from emotion.
‘We don’t make market predictions. We just ride the bucking bronco.’
Bill Dunn, Dunn Capital Management.
