Skip to main content

Tips for TradeRadar Users - Filter Settings

A pattern has been developing where TradeRadar generates a BUY signal and then, within a few months, a weak sell signal is generated. The signal appears weak (Signal Strength indicator less than 60% or 70%, Kurtosis not high enough) because the the reversal is not abrupt.

What about those stocks that move up nicely and then run out gas, dropping little by little until the profits are all gone? I have just seen this happen with PacificNet (PACT) and TradeRadar never flashed a solid SELL signal.

I believe the issue here is that the TradeRadar engine generates its best signals when there are more than eight months of daily data available. When you have less data to work with, the solution is to reduce the amount of filtering. The default value is 5 days. Try 3 or 4 days. Not only will the Signal Strength increase, the Kurtosis will also increase. At that point the Dashboard may flash the three green lights that indicate a solid, actionable signal.

As two examples, I have been reporting on Tarragon Corp. (TARR) and the SPDR S&P Homebuilders ETF (XHB). If you analyze the data over the last six to eight months, setting the filter to 2 days from 5 days transforms a weak SELL signal into a very strong SELL signal.

A note about Kurtosis: when there is less data, the peaks tend to be wider in relation to the amount of data in the period. Even though the Dashboard light for Kurtosis is set to yellow, for a lesser amount of data it might better be interpreted as green.

If your gut is telling you that you should sell but TradeRadar is telling you to hang on, try these analysis techniques. After I do a bit more research, I will be getting an update out for the TradeRadar software that will do some of these adjustments for you.

Comments

Popular posts from this blog

Brazil - in a bubble or on a roll?

A couple of years ago, no one recognized the real estate bubble even though it was under everyone's nose. Now, analysts and bloggers are seeing bubbles everywhere they look. One of them, they say is in Brazil whose Bovespa stock market index has doubled in the last 12 months. Does the bubble accusation hold water? I don't think so and here are 7 reasons why Brazil is by no means a bubble economy: Exports have held up over the past year thanks to demand from China for Brazil's soya exports and iron ore. This was helped by the the Brazilian government's drive to improve trade links with Asia and Africa. Export diversification, spurred by a more active trade policy and increased focus on "south-south" trade under current president Lula, helped mitigate the decline in demand from OECD (Organization for Economic Co-operation and Development) countries A "sensible" economic framework has been in place since the 1990's. This has included inflation

Unlock Stock Market Profits - Key #1

This is the first in an ongoing series of articles where I discuss what I feel are keys to successful investing. It is based on a post that provides a summary of the ten keys that individual investors should use to identify profitable stock trades. ( Click here to read the original post ) There are two basic steps to investing. First, you need to find stocks that seem to have some potential. Then you have to determine whether these stocks are actually good investments. There are many stocks that at first glance look interesting, but further research reveals that there are too many negatives to warrant taking a position. This first post in the series starts at the beginning: getting good investment ideas. Key #1: If something special is happening to a stock, it will be reflected in some kind of unusual activity in the markets. As individual investors, we will never be the first to know; however, unusual activity can be an early sign that allows us to follow the Wall Street professional

Unlock Stock Market Profits - Key #4

This is the fourth article in a series of posts describing 10 tools to help you identify and evaluate good investing ideas. It is based on a post that provides a summary of the ten keys that individual investors should use to identify profitable stock trades. ( Click here to read the original post ) With this fourth post, we will continue another step along the path of finding stocks that seem to have some potential. The first post in the series discussed how to use unusual activity to identify investing ideas. The second post described how to use stock screeners. The third post described how to use lists of new highs and new lows. This post will focus on identifying social or business trends in order to find investing ideas. Information on new trends might turn up anywhere. In conversation with friends or business associates, in newspapers or magazines, on TV or though your work. The key is to be aware of trends and how they start, stop or change. We'll start by describing what