This is a trading item or a component that was created using QuantShare by one of our members.
This item can be downloaded and used by QuantShare Trading Software.
Trading items are of different types. There are data downloaders, trading indicators, trading systems, watchlists, composites/indices...
You can use this item and hundreds of others for free by downloading QuantShare.
Top Reasons Why You Should Use QuantShare:
Works with US and international markets (stock, forex, options, futures, ETF...)
Offers you the tools that will help you become a profitable trader
Allows you to implement any trading ideas
Exchange items and ideas with other QuantShare users
Our support team is very responsive and will answer any of your questions
We will implement any features you suggest
Very low price and much more features than the majority of other trading software
The percentage of stocks that trade above their moving average is a popular measure of market sentiment. When a higher number of stocks trade below their moving average, the indicator value decrease and traders consider this as a bullish sign and expect a rally to occur in the coming days.
The moving average ratio is a market indicator; it is the ratio of the percentage of stocks that trade above their 50-day moving average (medium term) to the percentage of stocks that trade above their 150-day moving average (long term).
Buy signals occur when the moving average ratio falls below a threshold. The threshold should be chosen depending on the market you are trading and the periods used to calculate this ratio.
You may use the rules analyzer to simulate or backtest this market indicator and choose the appropriate threshold.
Note that a filter is applied to this composite; the filter instructs the application to consider only stocks that have a 30-bar simple moving average volume higher than 10000 shares.
This filter as well as the periods used to calculate the moving averages could be easily changed.
The item first creates two composites using the "AddComposite" function.
AddComposite("above_50", close > sma(50), _CompAverage);
AddComposite("above_150", close > sma(150), _CompAverage);
It then creates a filter by associating a rule to the "filter" variable:
filter = sma(volume, 30) > 10000;
Finally, a script loops through the above composites and divides the percentage of stocks trading above their 50-day moving average by the percentage of stocks trading above their 150-day moving average.
Trading financial instruments, including foreign exchange on margin, carries a high level of risk and is not suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in financial instruments or foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and seek advice from an independent financial advisor if you have any doubts.
