The quality of the current trend is calculated by adding or subtracting one point to the total value depending on the following criteras:
1. EMA-8, MA-20, MA-50, MA-100, MA-200 , each get a point if they are increasing. 2. EMA-8 > MA-20 > MA-20 > MA-50 > MA-100 > MA-200 , each condition that is true gets one point.
On top of the Trend Quality value we apply a "weekly" (5 periods) and a "monthly" (22 periods) moving average.
When above a value of 5, a strong trend is indicated and hence a trend following strategy should be used.
Use this to Buy when bouncing back from e.g MA-20 or a confirming consolidation/candlestick/trendline pattern.
When the trend decreases below Zero a trend shift may have occured.
Idea, curtesy: Tobbe Rosèn
Notes de version
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Adding the following rules based on Mark Minervini:
3. The current stock price is at least 30 percent above its 52-week low, gets one point 4. The current stock price is within at least 25 percent of its 52-week high, gets one point. 5. The 200-day moving average line is trending up for at least 2.5 "months", gets one point. 6. Close > MA-50 , gets one point
The trigger value has thus been moved to 9 for when a strong Trend Quality is in action.
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Thx for sharing this.. Very promising.
Seeing as this uses the weekly and monthly MAs, it doesn't seem to work properly intraday, does it?
Any idea on how to make it work on the 1h for example? Thx again.