Tuesday, October 17, 2006

Trade Ideas: Custom scan

The Trade Ideas software offers many opportunities to define stock screens on an intraday level - but not everyone wants to (or can) work with the intraday movements of stock (me included). Trade Ideas will soon be introducing a custom scan feature based on daily data:

The company offers a number of pre-defined scan options to get the ball rolling:

But the real fun comes in its custom stock feature:

Users get to select three options - but there is a great deal of flexibility available to the user in defining those parameters. For example, all the major indices are trading well above their 20-day MAs - so stocks at their 20-day MAs could be considered undervalued; so we can make our first choice "Max % up from 20-day MA", which I have selected to be 1%.

Next we can look for bullish movement; because we are scanning for stocks near, or above the 20-day MA, we can select for stocks which are (likely) crossing through this average on the way higher. To do this, I have opted for stocks which have risen for at least three days in a row (which should cover the 20-day MA crossover - if not, they should be close to doing so). The 3-day crossover also selects for stocks making a bullish "three white soldier" candlestick combination:

The final choice can depend on what you like to look for in a stock: volatility? volume? relative position in a trading range?

I have opted for a "Minimum Position in Yearly Range":

As for the output - here is what I got:

A total of 58 stocks were produced (It would be good to see on the initial output how many stocks appeared on the scan). A sample chart of 8 of these stocks looked as follows:

The best way to use this feature is to first look at what the markets are doing - how they are performing relative to key standards? eg. moving averages. Then, adjust the scan parameters accordingly. For people who prefer to work with (or can only work) with end-of-day data, the Custom feature is a valuable tool.

Finally, there is a "peep" option to see what parameters other people are using (although I was confused as to why some settings included more than 3 parameters???):

If you would like to try a full version of the Trade-Ideas software, follow this link for a free 7-day trial.