InVivo.RMI Indicators for DJ EURO STOXX 50®

Teresa, February 24, 2008 @ 6:19PM ET | Link | RSS | Read via Email | Start a Discussion  

InVivo.RMI indicators for clients swing trading components of the blue chip DJ EURO STOXX 50® index using eSignal daily charts are now available for download.

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Using The RMI Indicators

When playing momentum stocks, we are extremely selective because we know momo doesn’t last forever, or as John Maynard Keynes said, the goal is “to outwit the crowd, and to pass the bad, or depreciating, half-crown to the other fellow.” For long positions, we insist that price must be up AND the stock must have positive relative momentum. When a trade has been qualified to this degree, we can tighten the StopFactor to 1.1.

The position of the histogram bars and the blue threshold lines are very important. When both the histogram and the threshold lines are above zero, a stock is deemed to be experiencing serious relative outperformance. When both the histogram and the threshold lines are below zero, a stock is deemed to be experiencing serious relative underperformance.

A number of other combinations and permuations can present. The price bars colored by the InVivo.RMI.Stops is done according to these rules:

  1. Green = Histogram > 0 and Histogram > Threshold = Relative Outperformance
  2. Red = Histogram < 0 and Histogram < Threshold = Relative Underperformance
  3. Yellow = all other combinations

Regardless of color, the trader must use the trailing stops as indicated by the blue and magenta dots. See Using InVivo.Stops.

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