Thanks for the feedback on last night’s High Tight Flag post. It seems the HTF is very popular. I was worried that it might be difficult to write code that will consistently find the pattern, but based upon tonight’s results, it might not be as difficult as I thought. It is important that the code consistently finds valid HTFs because when I start backtesting the pattern, I want to be sure that I am backtesting a HTF and not something else.
In last night’s post, a reader asked about excluding bio-techs from the scans. I can test to see the effects of excluding bio-tech stocks once the code is finished and backtesting begins. I strongly believe that it will be a mistake to exclude bio-tech stocks, but I am basing my belief on tests I did for PDS where I excluded bio-techs. In any system, and for any trader, one must use good money management. It is possible to trade bio-techs and survive the occasional knee-capping as long as you are using sound money management techniques.
I will be leaving tomorrow to enjoy a few days of Spring Break in the mountains with my family. Blogging will be light through Sunday, if at all, as I’m not sure my wireless broadband will work.
ANF looks like another candidate, no?
Nope, not according to Bulkowski’s criteria.
This is good stuff. I’ll be away for a week too, but it should be fun to try some of these out once you’ve finished.
looks like Bulkowski in his book wrote about buying stocks that break the downtrend of the line but has since said on his site that he has realized that although the gains are larger it leads to too many failures and the buypoint should be at the highs instead as O’Neil originally suggested. But he doesn’t seem to think much of “3-5 weeks” of consolidation… are you going to make a post listing the way you define the screen? How do you determine what constitutes “consolidation”?
lol, right now, I’m trying to exactly filter Bulkowski’s criteria.
Consolidation will be any trading between the top of the flag and the flag low. Of course a flag low has to be set first before we have a consolidation period, so that is a limitation, but it appears that it might be effective.