Average Pullback

Discussion in 'Technical Analysis' started by DoxazoAdonai, Jun 27, 2005.

  1. Good morning! Does anyone know of a site, service or methodology that can provide and/or automate average pullback numbers for individual stocks?

    Thanks!

    Scott
     
  2. Do you mean a pullback so as to enter on a stock that is on a healthy uptrend? I would think it would be difficult to come up with an average number since stocks vary greatly. If its a strong uptrending stock, in a strong industry, usually dont pullback more than 50% from their last pivot lows. Pullbacks that are more than 50% usually results in stocks not making a new high....they stall at resistance. Pullbacks that are 100% or more can sometimes mean the begining of a trend change...they only go up slightly but never even make it to the last pivot high....Thus the formation of the head and shoulders pattern. But none of this rally means much...whats much more important is where does it pull back to...is it and area of minor / major support?.....is it a Fib level only? I look for volume drying up as its pulling back to support, with no monkey business from the candles. Ofcourse news...upgrades/down grades...earnings.... always through a wrench into this strategy. This is pretty much the basics for swing trading....hope it helps.
     
  3. Hi Scott,

    In fact, what you ask for would be the ultimate secret of trading. You could say that if you happened to find such 'methodology' not much else remained to be done.

    Of course a lot of quackery of different kinds exists around this topic.

    In truth, getting at answers is the real the nitty gritty stuff of our trade. Not much hope anybody is going to post 'gainful' knowledge about these matters.

    Be good,
    nononsense
     
  4. \
    I know a methodology. What you do is look at charts and note the pullbacks and then average them. Granted this is a lot of work so it probably wont fly.
     
  5. Hmmm... so this is like a Holy Grail thing, huh? I'm just getting started in terms of active trading, have been working on various Excel tools, and investigating different charting services, internet brokers, etc. In my quest to remove as much emotion as possible from the system, I'm just trying to find any and all sources of objective data. Something like "average pullback over the last 12 months" could be calculated manually for any given stock, so I just figured somebody must have those numbers posted somewhere by now. I want to use them to develop a good trailing stop methodology. I figure having my trailing stops lag the current price by an amount 2-3% greater than the average pullback would be a good place to put them. Hence the desire to get my hands on the numbers! I suppose if I were trading for a living (and had that kind of time), I wouldn't have as much desire to find stuff "already out there". But such is not the case (yet).

    Thanks much!

    Scott
     
  6. =======

    DoxazAdonai;

    Good methods;
    1] include several stocks/ETFs you learn like the back of your hand

    2]average pullbacks per 30 days and keep polar bear markets separate from bull markets and average can be improved on, and see number [1] again because sideways trends will not be close to up/downtrend at all

    3]speaking of learning a few stocks like the back of your hand.
    the handwork to determne this should
    do you good. Did me good also.:cool:

    Wisdom is the principal thing.
     
  7. PetaDollar

    PetaDollar Moderator

    You have the right idea, Scott. These kinds of statistics are the starting points for a successful methodology. I call it "winner profiling"-- you get all kinds of specific information on how your winners are supposed to behave. Then, when your current trade behaves differenty, you have a reason to exit. You will also want at other things like how long (amt of time) the pullbacks last, and note anything significant about the price range is pulls back to (many times a previous swing high or top of a range).
     
  8. toe

    toe

    Wealth-Lab website members have posted about as many short term pullback derivations as you can imagine, when your through running them you can create your own.
     
  9. TimP

    TimP

    I would prefer to know future drivers of supply and demand (whether recent trades have been driven by a sell order or a buy order, and current volumes and levels of bid and ask quotes) rather than what some historic pullback ratios or averages might have been. An average might implicity influence the primary drivers of S/D, but are most likely already reflected in the drivers themselves.
     
  10. The software Investor RT at www.linnsoft.com will give you that capability. It will take a "typical" software learning curve and some time, but it can be done.

    Having done similar research myself in the past (I buy pullbacks), I think you'll find that an "average" isn't of much help, because deviation from a mean seldom sticks to an average. Just when you think you've got it figured out....woops, there goes the exception, and you're stuck with it!
     
    #10     Jun 29, 2005