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The Power of Volume With High Momentum Stocks

March 9, 2010

The following chart shows the impact of using only the 5-day volume change or ROC of volume to trade the  Livermore Top 10 unhedged.  As you can see, the returns and risk-adjusted returns are very impressive for such a simple condition–exceeding the returns from buying using other simple conditions such as up/down days or buying on 5-day ROC<0.  I have not had much time to do thorough research, but it appears so far that consistent with practitioner theory–volume is a big key to timing high momentum stocks.

2 Comments leave one →
  1. March 9, 2010 5:24 am

    Good read on using volume change to trade. Seems like a simple wat to make some decent returns.

  2. February 10, 2011 2:57 pm

    Hello there! This is my 1st comment here so I just wanted to give a quick shout out and tell you I really enjoy reading through your blog posts. Can you suggest any other blogs/websites/forums that deal with the same topics? Appreciate it!

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