52-week high/low

Discussion in 'Trading' started by Amahrix, Jul 23, 2019.

  1. Amahrix

    Amahrix

    The information of 52 week highs & lows carry no intrinsic value and in fact distorts views and confusion. It doesn’t help with anything. It is utterly useless to use as reference points. They’re random numbers a.k.a. noise. It should be ignored.

    Can you convince me otherwise?
     
  2. Ayn Rand

    Ayn Rand

    Do you need to know the 52 week high low to trade an asset - no. However, sometimes it is nice to know.

    The spread between the high and low gives you a crude proxy of how volatile the stock is.

    Example - 52 week high - low 8 -10 Unless there is some pending news the probability of the asset moving 5 in a day is low.

    Also there can be some significance as the price of an asset tends toward the 52 week high or low. You'll hear support and resistance levels. If asset is tending toward 52 week high or low you would want to combine your analysis with additional data. The asset has the probability to be more trade worthy than an asset in the middle of its high - low.

    If you happen to know the high low good. If not, not the end of the world.
     
  3. maxinger

    maxinger

    It is one of the most useless foolish 'simple' concept to use for trading.

    We need to enter position early. don't wait and wait and wait for confirmation, double confirmation, triple confirmation for price to hit 52 week high / low and for all the planets to be aligned.

    By the time you enter based on 52 week high/ low, it might be too late.
    And market might start to reverse direction.

    Market is merciless to those who are too slow to react, or who hestitated too much.
     
    Amahrix likes this.
  4. Amahrix

    Amahrix

    Rather “How volatile the stock was.”
     
  5. Amahrix

    Amahrix

    I mean to say it is worth going out of your way to not know the numbers versus knowing as knowing leads to too much information which leads to a more stressful position to make decisions under uncertainty. Part of it leads to voodoo magic with TA (I won’t argue TA because it’ll go on like arguing religion).

    Anyways, thanks for your response ☺️
     
    Last edited: Jul 23, 2019
  6. Just like everything else ...
     
  7. Amahrix

    Amahrix


    Yeah pretty much. Focus should be price for traders and long term value for investors.
     
  8. Many good companies when oversold or overbought may revert to the mean. Read it again before commenting. For example, analyze BMY or ADM, they are both trading close to 52 week low. Both are fairly good dividend stocks. A high probability trade is to sell OTM puts with strike price below or close to 52 week low, expiry date before ex-dividend date. Heavy institutional support exist.
    Much more data on these 2 , you'll need to dig it up...
     
    Last edited: Jul 24, 2019
  9. Amahrix

    Amahrix

    Fellow EliteTrader, your response epitomizes my argument.