Trout,
I am having a conversation with Trades - a fella who used to post extensively here.
We are trying to isolate turns in comms/stocks.
We usually head to the stockcharts page - identify the top performing sectors - then identify the top performing stocks in that sector. We have applied a few filters (8 RSI), (above the 50 EMA), (MACD), that sort of stuff. But we have found that the horse has already bolted out the barn by the time we identify the mover. One "tell" is increased volume to the upside accompanied by a move up of the MA's.
The problem is that fierce retracements often occur that take you out of the trade. It's the old story of the "smart money" moving the stock up - then catching the newbies who have just boarded the train - collect their loot and leave us wondering "What the.....?"
We found one stock today - NAT - that bounced off the 50 - I bot on the bounce - and will add to it as it moves up.
I know that your "holy grail" signal is the 66 % retracement - but I have found with most bounces that a 50% bounce is a common occurrence.
If you can enter on the uptick after the 50 bounce, odds favor a good trade.
We have been looking for an indicator that triggers a "heads up" that a comm/stock is about to move. I honestly don't think that it exists. We need to look for set-ups that offer all the usual signs of a turn. There is no single indicator that triggers a trade - although I used a 10 EMA to short Oil back in July. I think that it's a lot more complicated than that.
We are both perfectionists (perhaps a handicap in this business) and are trying to detect a condition that triggers a turn.
Any suggestions would be considered - but I suspect that I know what your response would be, as I have seen your strategy in action. Comments from other members of this board would be welcomed.