I received a good question from our support forum that I want to repeat here. It’s a simple request about how to model a pattern that this customer wants to see in the market.

Question: Stocks Taking a Breather

What filters or alerts can I use to finds stocks that are, “taking a breather“?
I.e. it is in a daily uptrend, but volume slows and price drops; OR, it is in a
daily downtrend, but volume slows and price rises slightly.

Tip: Understand the Left and Right Side of the Chart

Here’s a modeling tip. When I start out modeling an idea or pattern I want all my stocks to exhibit, I start with the filters. The filters in Trade-Ideas are great for describing the left hand side of the chart – i.e., everything that’s happened leading up to today or this minute (depending on what increment of time you are using on the horizontal axis). The Alerts in Trade-Ideas describe the first point of the right hand side of the chart – i.e., what happens the moment Trade-Ideas alerts you. Ok. Let’s give this a shot.

Answer: Stocks Taking a Breather

Good question. I’d put together the following FILTERS:

• Daily Uptrend = Min Up Days, 2
• Daily Uptrend = Min Up Candles (15 min), 2
• Daily Uptrend = Min Up from Close, .01 $
• Daily Uptrend = Min Position in Range, 75%
• Volume Slows = Max Current Volume, 1

and then I would choose my trigger with the following ALERT:

• Price Drop = Running Down Intermediate, 1 or leave the ratio blank AND/OR
• Price Coiled (buyers and sellers evenly matched – consolidation) = NR7

See if that works for you. To get the opposite view, configure this and then use the “Flip” button.

Footnotes and Related Articles:

• Here’s another article we wrote about lite volume moves called, “What to do When You’re Suspicious of Low Volume Rises in the Market“
• Check out the whole category of articles written about patterns we’ve modeled from various other authors and articles we’ve come across called: Strategy-Sessions
• Use The OddsMaker to further understand what trading rules would produce the optimal trading outcome for this strategy in the recent market. Trading rules would include the answers to these questions: How long to hold each opportunity? When during the market session should this strategy be traded? Where should the stop loss be set?
• Remember that these set-ups are sketches meant to give you an idea how to model your own trading plan. Use this ‘as is’ or modify it to your own liking as many others do. Know, however, that Trade-Ideas.com and all individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, alerts and all other features are for research purposes only and should not be construed as investment advice
• See this video on our Collaborate function to learn how to open these strategies inside Trade-Ideas PRO