quote:
Originally posted by Phaedrus
Over the last 15 months or so, MHI has been in an accelerating uptrend. This necessitated the use of sequential trendlines as prices left the older trendlines behind. Unless these obsolete trendlines were updated, much of your gains would be given back to the market before sell signals were triggered.
Price action has now broken below the most recent trendline and below the 6x ATR trailing stop, triggering sell signals.
Note how the ATR (Average True Range) based trailing stop automatically adjusted itself to the accelerating price of this stock. That is the strength of a dynamic indicator that is moderated by the
volatility of the underlying stock price movements.
http://img.photobucket.com/albums/v4...456/MHI001.gif