Hi HomeBrand,
The Rate of Change is probably a misnomer for this scan anyway. ROC usually displays the difference between the current price and the price x-time periods ago. In this scan we could simply use percent change over 1 bar to get the same result. I have various versions of this scan that use longer time periods, so have never bothered to change the description. The 5 percent change is a reasonable balance between stocks that have attempted a decent move, and stocks that have only moved for example 2 percent. Also take into account market price brackets…stocks up to 10c trade at tick size of 0.1c …10c up to $2.00 the tick size is 0.5c,and so on.
Almost every significant price Breakout is accompanied by a sharp increase in volume, which is why we use a long 50 period moving average of the volume as our basis to smooth out the normal small daily fluctuations in volume. Any stock that can add 50 percent to this average volume, in one day could be considered unusual, and bares further investigation from a Trader.
Cheers.
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