Detecting New Trends Early by David R. Steckler
Finding a trend early is a primary goal for many traders. Hereís a technique developed for stocks that can work for any instrument with volume information, using a combination of mass index and money flow index.
Everyone enjoys buying a stock just at the start of an explosive move up. But how do you find those opportunities? For a number of years, Iíve used a combination of Donald Dorseyís mass index and Brian Greenís money flow index to identify conditions that improve the likelihood of finding a stock with the potential for rapid price appreciation. The earlier you get in on these breakout moves, the greater your chances for maximizing potential gains. Big moves occur when a stock breaks out of a trading range and begins to trend. Stocks trend higher when, over a defined period, they make a series of higher lows followed by higher highs.