Take a look at this chart for OPAL.
If are stumbling onto OPAL just now, as I did, you’re likely kicking yourself and asking, “Why didn’t my screener pick that up that breakout?” The most obvious answer is probably, “Because I wasn’t looking yesterday, or the day before, when I should have been looking.”
But, also, look at that chart. It’s a godawful, going-sideways mess that trying to trade would have meant a lotta whipsaws. “How to fix that problem?” Well, I’m glad you asked. So here’s OPAL again, but this time charted with that Supertrend template I developed yesterday.
Yesterday’s version used a ‘Hull MA’ that I’ve switched to just ‘MA’. The “Buy” rule would be the same as before, requiring two positve conditions. The ‘Sell’ rule woud be the same, namely, “When in doubt, get out.”
SUGGESTION: Build a watchlist at BarChart with stocks/ETFs you’d be willing to track and trade and then chart 'em with SuperTrend. If the security is illquid and/or choppy, SuperTrend does a pretty good job of not letting you get into trades you probably shouldn’t be attempting, but --surprisingly-- not a better job overall than HA Smoothed, which I’m going to have to revisit. LOL
So this thought occurs to me. Time-Price series, just like people, each have their own “personality”. Therefore, a palette of chart templates is needed, and whether to get into or out of a trade could be done by majority vote among them. (Yep, that sounds just like what Ed Downs of OmniTrader fame used to say. But the guy has a valid point.)
PS: Free accounts at BarChart are allowed five chart templates, which would be a manageable number to construct and would allow quite different factors to be emphasized, as a follow-up to the point Jhawker made earlier about the value of diversifying investing techniques rather than just asset classes.