V.18:8 (42-46):Catching DJIA Breakouts by Mark Vakkur, M.D.
Product Description
Catching DJIA Breakouts
by Mark Vakkur, M.D.
Buying breakouts in the Dow Jones Industrial Average works well - but there are caveats.
If the trend is your friend, the simplest way to use that idea is to buy only those markets that are breaking out to new highs. But is this really a good strategy? As it turns out, at least for the Dow Jones Industrial Average (DJIA), breakouts are very useful in identifying periods of increased profitability. I studied breakouts on the DJIA from February 1988 to November 1998. If breakouts truly are useful, buying a breakout over this 11-year span should have led to a greater than average subsequent four-week and eight-week profitability.
Obviously, the DJIA has been in an extraordinary secular bull market since 1982; it may behave differently in a downtrend or a trading range. Many market players are now used to buying high and selling higher. I leave it to you to apply the concepts presented here to your tradable of choice. That said, here's how the DJIA performed following breakouts.
Buying breakouts in the Dow Jones Industrial Average works well - but there are caveats.
If the trend is your friend, the simplest way to use that idea is to buy only those markets that are breaking out to new highs. But is this really a good strategy? As it turns out, at least for the Dow Jones Industrial Average (DJIA), breakouts are very useful in identifying periods of increased profitability. I studied breakouts on the DJIA from February 1988 to November 1998. If breakouts truly are useful, buying a breakout over this 11-year span should have led to a greater than average subsequent four-week and eight-week profitability.
Obviously, the DJIA has been in an extraordinary secular bull market since 1982; it may behave differently in a downtrend or a trading range. Many market players are now used to buying high and selling higher. I leave it to you to apply the concepts presented here to your tradable of choice. That said, here's how the DJIA performed following breakouts.
FOR THOSE ORDERING ARTICLES SEPARATELY:
*Note: $2.95-$5.95 Articles are in PDF format only. No hard copy of the article(s) will be delivered. During checkout, click the "Download Now" button to immediately receive your article(s) purchase. STOCKS & COMMODITIES magazine is delivered via mail. After paying for your subscription at store.traders.com users can view the S&C Digital Edition in the subscriber's section on Traders.com.
| Take Control of Your Trading. |
| Professional Traders' Starter Kit |
| All these items shown below only $299.99! |
| Click Here to Order |