Nerd Dip Buying for Stocks

11 thg 8, 2020

This script is intended to generate BUY signals during pullbacks in stocks which are in the midst of mid to long-term uptrends. The ideal timeframe is Daily.

Signals should be acted upon at or near the close, or at open next bar.

I use 2 simple moving averages (SMA1 and SMA2) to determine whether the stock is currently in an uptrend. The default parameters are:
SMA1 = 120
SMA2 = 160
Buy signals are only produced when SMA1 is above SMA2.

As an additional filter I also use the Adaptive Moving Average (AMA) developed by Perry Kaufman. The settings are (10, 10, 30). Buy signals are allowed only when the bar closes above the AMA.

Lastly, the Buy signal itself is computed utilizing the Greatest Swing Value, a concept pioneered by Larry Williams in his book Long-Term Secrets To Short-Term Trading. You can control how often BUY signals appear by tweaking the parameter GSV Buy Factor. The smaller the number, the more often BUY signals appear. By default,
GSV Buy Factor = 1.8

This indicator has been developed with stocks trading in mind only, in particular US stocks. Feel free to apply it to other markets or asset classes and let me know the results. Thank you very much.

14 thg 8, 2020

Phát hành các Ghi chú

The trigger price for BUY signal is now visible for the current bar, denoted by a green cross above the bar.