> I've always kind of wondered if there were "trends" (given the chaotic nature of the market) that individual stocks generally followed. For example, does stock X generally increase at least n% before any downward change. The nice thing about a computer handling the tracking is that you put in the buy/sell prices you're "guessing" at (based on this %) and let it cook over a few weeks. It could handle calculating the profit made (minus fees, etc) and give you a net change at the end of the testing period. Obviously, there are a bunch of other parameters you'd need to set and track, but you get the idea. The next step would a system that would use feedback to adjust all these parameters automatically.

This would be essential. Today's trends are not necessarily the same as yesterday's trends and might be different than tomorrow's trends. So, the system would have to analyze the trend of the trends...using your example: Stock X used to increase n% before a downward change, but now increases m% before a downward change...the trend within the trend could be that n=12, m=14, and the change from n to m was a gradual linear change over 6 months. Whatever. But this could help predict the future, if this trend of the trend continues.

The biggest difficulty here is identifying the parameters (factors) and determining the different types of trends to consider (ie. close, ask, volume, spread, etc.). There are charting programs out here that use different algorithms. The difference here is that we are talking about utilizing real time quotes. I would have to say that I personally feel that this is not going to work. I don't think there is such a thing as trends that are that short-term. I think the trends that will work are those where you identify a period of time, that is not minutes but at least days, when you should buy or sell. This means you would not need real-time quotes.

Anyways, good luck to all.

Joe

P.S. Want a hot tip?