I'm a long only intraday naz stock trader. I've been looking for some indicator that would have gotten me out of the last six weeks of trading, during which my method has been losing pretty bad. Looking at the 30 day ROC or 30 day momentum (Qcharts), it looks like had I only traded when ROC was positive, I would have avoided the losses of the last six weeks while retaining my winning days. Now this makes sense since my method is based on positive momentum. Just wondering if I'm maybe kidding myself here by giving validity to this. I know one can always find and form fit some indicator to work on past data. And please don't give me the usual "Find another way to trade/trade futures" advice. I'm trying that...... always. Anyone successfully use ROC/Momentum indicators?
I like the ROC (ratio of price now to price some period ago) because, with ratios, I can directly compare two different instruments. I can also calculate a derivative ROC (i.e. ROC on something other than price, including ROC itself). There are all kinds of neat things we can do with it. I have found that by using a short moving average in place of the older observation, I get a smoother ROC without introducing any lag. Enjoy!