Why trade breakouts?
At first, when buying breakouts it looks contradictory to the idea of buying low and selling high. But, it is still advisable to buy breakouts because it gets you on the right side of the market. We should not fight the trend. Markets can remain irrational longer than you can remain solvent.
To improve accuracy on breakouts, we can use the moving averages.
If the prices are above 8EMA, 21 EMA and 8EMA > 21 EMA. Trade breakouts...
Friday, June 2, 2017
Saturday, December 31, 2016
Analysis of Nifty
Data Tested from 2-Aug-2010 to 29 July 2016.
Is gap up a good buying opportunity?
Among the tested 1503 trading days, Nifty gapped up 761 times.
The total of close-open comes out -26454 points on those 761. It's not a
good decision to buy on gap up, we should look for short opportunity.
HISTOGRAM
Bin Frequency
-180 15
-160 3
-140 7
-120 29
-100 24
-80 51
-60 65
-40 115
-20 134
0 891
20 83
40 46
60 19
80 12
100 4
120 2
140 1
160 0
180 0
More...
Trading stocks that open with a gap and do they trend
Markets are random by nature. We have to look for events where the market will behave in a non random fashion.
Take the stocks which opened with a gap of more than 2%, then wait for 5/15 minutes for the stock to set the opening range. Then, take the trade in the direction which is showing strength.
For analysis purpose, lets start with gap up of more than 2%, does the stock rise? Data tested from 2012.
StockName , Sum of (close-open) %,...
