RED DIRT TRADER: FBB Scan Criteria

RED DIRT TRADER

This blog was designed as a place for me to store links that I find helpful. These posts are not investment advice. If you’re looking for advice call your GO BROKER. My belief is the person who cares most about my investments is ME. My hope is the readers of this blog find the sidebar links as useful sources of information while attempting to learn how to manage their own money. As for advice, my Dad gave me the best I’ve ever heard, “Never trust anyone else with your money or your woman.”

Friday, November 16, 2007

FBB Scan Criteria

Here's what it looks like in plain English:

FBB SCAN• For the last market close:• United States Stocks with...• Daily Close for today is greater than Maximum Close over 60 days starting yesterday• Daily Close for today is greater than Daily Open for today• Daily Close for today is greater than or equal to 0.25• 63-day Exponential Moving Average of Volume for yesterday is less than or equal to 500000• Daily Close for today is greater than Daily Close for yesterday• Daily Volume for today is greater than or equal to Minimum Volume over 60 days starting today times 5• Daily Volume for today is greater than or equal to Daily Volume for yesterday times 3• Daily Close for today is less than or equal to 5

Here's the Scan Expression:

[type = stock] and [country = us] and [daily close > yesterday's daily max(60,daily close)] and [daily close > daily open] and [daily close >= 0.25] and [yesterday's daily ema(63,daily volume) <= 500000] and [daily close > yesterday's daily close] and [daily volume >= daily min(60,daily volume) * 5] and [daily volume >= yesterday's daily volume * 3] and [daily close <= 5]

This scan only produces a list of stocks that meet the criteria above. That list of stocks is then thinned down by checking the recent chart pattern and looking at Insider holdings. You may want to thin the list down more by adding other criteria you deem necessary. Once you have your final list, the trading rules must be applied. Basically the first rule is to set a buy stop just above the breakout candlestick. I normally try to watch the open of trading just to make sure there isn't a big gap up. According to what I've read in S&C mag the chart is to be set up with a 3 day ema and 6 day ema. Once your order gets filled you are supposed to stay in the trade until the 3 day ema crosses below the 6 day ema. I have my own set of trading rules that I follow so I basically ignored the articles info on rules. I suggest you use your own trading rules also.

I've tweaked this basic scan by adding other criteria in order to create other scans. For instance adding a certain PE to find only stocks with positive earnings. Or, by adding criteria to find stocks in a certain sector or market cap. Any how, above is the basic layout, tweak away to help you find the stocks that are breaking out of a Flat Base trading range.

# posted by Chris @ 11:45 AM