Time to focus on examples of strategies and how they are modeled in Trade-Ideas. The purpose of this entry is to not only learn a potentially new method of viewing the market, but to understand the thought process in creating a set-up that you can use to develop on your own.
The preconfigured alert window, "3 Day Breakouts on High Relative Volume," finds stocks crossing above their previous 3 day high for the first time on high relative volume.
Who Could Benefit
Our Momentum and Swing traders use this alert window setting as a starting point.
How It's Modeled
This alert window uses one key alert called, "Crossed daily highs resistance" set specifically to 3 days, to generate interesting trade ideas.
This window also has several preset filters. To isolate stocks moving up on strong volume we set the high relative volume filter to 1.3 which only shows stocks trading 30% above their normal volume activity at the time of the breakout. Additionally we set a Min Up from the Close filter to 10 cents to make sure the stock is positive at the time of the alert.
The best method we know of getting a good set-up in Trade-Ideas is to think of what the pattern looks like, then find the filters in Trade-Ideas that create that pattern over time (days, weeks, etc.) and then choose the alerts that identify when the target is in play. As an exercise you should try to model what a 3 day breakdown looks like and check your settings against the one we have on our website.
More explanations of other strategies can be found here. Click on the Help link.