Understanding the Position in 3 Month Range Filter

The "position in 3 month range" filter is used to evaluate where the current price of a stock stands relative to its price range over the past 3 months. This filter helps traders assess the recent price movement of a stock and identify potential trading opportunities based on its position within this range.

Here's how the "position in 3 month range" filter works:

Calculation of 3 Month Range: The filter calculates the price range of the stock over the past 3 months. This range typically spans from the lowest price (low) to the highest price (high) traded during this period.

Position Calculation: Next, the filter determines the position of the current price within the 3 month range. This calculation is expressed as a percentage, indicating how far the current price is from the lowest or highest price of the past 3 months.

This uses the same scale as the other position in range filters. 0% means that the stock is currently trading at the lowest price that it has traded in the previous 3 months. 100% means that the stock is trading at the highest price of that time frame.

This filter is similar to the Position in Previous Day’s range filter, because it does not look at today’s data when they calculate the range. If the current stock price is $10, and the highest price in the previous 3 months was $9, then the value of this filter will be above 100%. If the current price is less than the lowest price of the last 3 months, then this filter will have a negative value.

The current price is based on the last print. There is no smoothing or averaging. These filters update before, during, and after market hours.

The column for this scan will be displayed as a graphical indicator. To view the percentage, simply right-click on the column and deselect the option labeled "Graphical Indicator."

If you opt to utilize the graphical indicator, here's a brief overview of the various types of graphics and their corresponding meanings:

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Position in 3 Month Range Filter Settings

The settings of each Trade Ideas filter are defined in the Window Specific Filters Tab located in the Configuration Window of your Alert/Top List Window.

Here is how to setup the filter in your configuration window:

• Set the minimum value to 25 to see stocks which are at least 25% above the low of its 3 month range.

Using the Position in 3 Month Range Filter

Several trading strategies can be employed with the Position in 3 Month Range filter. Here are a few examples:

Breakout Trading: Traders monitor stocks that are trading near the high or low of the 3-month range. A breakout above the range's high could signal a bullish breakout, prompting traders to consider long positions. Conversely, a breakout below the range's low may indicate a bearish breakout, leading traders to consider short positions.

Trend Confirmation: Traders assess the position of the current price within the 3-month range to confirm existing trends. If the price consistently stays near the high or low of the range during an uptrend or downtrend, respectively, it suggests that the trend is still intact. Traders may consider entering positions in alignment with the trend.

Reversal Trading: Contrarian traders look for stocks that have moved significantly away from the high or low of the 3-month range, indicating potential overbought or oversold conditions. Reversal signals near the range's extremities, such as bearish or bullish candlestick patterns, may prompt traders to anticipate a reversal back towards the mean.

FAQs

What does the "position in 3-month range" filter indicate?

• This filter indicates the current position of a stock's price within its price range over the past three months. It helps traders assess whether the current price is closer to the high or low of the recent price range, providing insights into recent price momentum.

Why is the "position in 3-month range" filter important in trading?

• This filter is important because it helps traders gauge recent price momentum and identify potential trading opportunities. It provides insights into whether the stock is trading near its recent highs or lows, which can be useful for determining potential breakout or reversal points.

Can the "position in 3-month range" filter be used for both short-term and long-term trading strategies?

• Yes, the filter can be used for both short-term and long-term trading strategies. Short-term traders may use it to identify intraday or swing trading opportunities based on recent price momentum, while long-term traders may use it to assess the overall trend direction.

How should traders interpret different positions within the 3-month range?

• Traders may interpret a position closer to the high of the 3-month range as indicating bullish momentum or buying pressure, while a position closer to the low may suggest bearish sentiment or selling pressure. However, interpretation may vary based on other factors such as volume and news catalysts.