Signal Generation Criteria

The following is the criteria or condition requirements that stocks must meet in order to produce a trade signal. While the scan criteria follows the guidelines of The Power Spike Stock Trading System, it goes beyond simply locating power spikes. Our more stringent criteria helps to obtain the highest quality signals.

The Power Spike Signal Service provides you with a professional level scan process. You'll receive much more information than just the name of a spike producing stock. Our rigid selection process reveals only the highest quality signals and our Power Spike Signal Generation Report provides the detailed information you'll need to begin making informed trade decisions.

The Power Spike Signal Service is different from any other trade service available. And the differences begin right here... where we disclose the Power Spike signal generation criteria.

An explanation is provided along with each criteria element to convey the basis and reasoning for the technical requirement. You will know what conditions must exist to generate a signal and why each element of the criteria is important to trade success.

Unlike other programs, we don't hide critical information from our customers. See why our program is a cut above the rest.

We disclose the full criteria.

Each criteria element effects trade success.
We don't apply needless requirements.

   We explain the reasoning behind each
       criteria element & how it effects trade
       performance.

Our database consist of over 8,000 stocks.

Our database is updated and scans are
performed every day the market is open.

No need to invest hard earned money on
charting software and data services.

   No need to waste countless hours learning
       software language and developing scan
       formulas.

You can sit back & relax...
We do all the work for you!

The instructions for effectively trading the signals are detailed in the book The Power Spike Stock Trading System. This book is included in the program.

A Power Spike is a highly reliable volume occurrence that predicts and precedes a strong market move. When a spike occurs a resistance level is created by the high of that spike day and a support level is created by the low of the spike day. The strong move may or may not occur immediately following the spike and the direction of the move can’t confidently be determined from the spike day action.

The odds favor a strong move in the direction of the support or resistance level break. Therefore, one must watch the action that follows the spike in order to determine which direction to trade.

BUT THAT ISN’T NECESSARY with The Power Spike Signal Service . As you will see, we generate the signal only when the support or resistance level has been completely broken.

We do all the watching and waiting for you.

You are notified of a potential trade when it is time to take action.

SUMMARY OF CRITERIA

Here is a summary of the signal criteria. These are the conditions and requirements which must exist in order for a stock to generate a Power Spike trade signal.

There are seven general criteria elements. Each is presented and is followed by a brief explanation of the reasoning behind the requirement.

Criteria #1: A Power Spike Occurs

Explanation: The Power Spike is located by applying Bollinger Bands to the volume data. A spike technically occurs anytime the volume exceeds the upper envelope band, but we go even further.

Often a stock trading within a narrow volume window for some time can create a spike with only a small volume increase. These are NOT strong spikes and the quality of the predictive value is less due to the weakness of the spike itself.

For this reason, we want to locate only strong spikes that offer much better predictive value. We therefore place a more stringent requirement to locate only strong Power Spikes, which is explained in the next criteria element.

Criteria #2: The Power Spike Is Strong

Explanation: In order to determine the strength of a spike and establish a minimum standard for signal generation, a comparison is made of the amount of volume occurring above the upper envelope band to the total volume. In other words, how much of the volume penetrated the upper envelope band?

Stock Chart

In order to qualify for a signal the stock must produce at least 15% of the total daily volume above the upper envelope band. This helps to assure that the volume doesn’t just pierce the upper band, but deeply penetrates through it.

This action indicates a strong Power Spike.

The daily Power Spike Signal Generation Report will display the exact percentage of penetration for each signal presented.

Criteria #3: Support & Resistance Level Established

Explanation: Once a strong Power Spike has been located, the system then defines the support level as the low of the spike day. It also defines the resistance level as the high of the spike day. This information is vital in the determination of which way to trade the spike.

Criteria #4: Support or Resistance is Fully Broken

Explanation: The system scans for strong Power Spike stocks where the price action has fully broken either the support or resistance level. All of the daily action (high, low, open and close) must occur either below the support level or above the resistance level. The system is set to trigger a signal as soon as the support or resistance level is fully broken.

We don't simply tell you when a Power Spike has occurred and then leave it up to you to monitor the stock for a support or resistance break. We monitor and track the action for you.

You are only notified when the stock actually breaks either support or resistance. That's the event that prompts your decision to trade or pass.

The daily Power Spike Signal Generation Report will display whether the stock has broken support or resistance. You'll immediately know whether the odds favor a long trade or short trade.

Criteria #5: Support or Resistance Break must occur within 15 trade days of the Power Spike

Explanation: Although the expected strong move doesn’t always occur immediately following the spike, time will begin to deplete the strength and value of the spike day. Spikes indicate “panic” trading, either excessive greed or fear. Over time the effect of that panic action will become diluted.

For this reason, the system scans for strong spike stocks which have fully broken either the support or resistance level and the amount of time between the spike and the break is no longer than 15 trade days. After this period of time the strength and predictive value of the spike can become questionable. Stocks that produce breaks after 15 trade days are excluded.

The daily Power Spike Signal Generation Report will display the number of days since the Power Spike for each signal presented.

Criteria #6: Average Daily Volume of at least 100,000

Explanation: Being able to quickly and easily enter and exit your trade is critical to success. This is trade liquidity. Trading stocks with low volume presents the risk of being unable to enter a position when desired or, even worse, being unable to exit a position when desired.

For this reason we have established a minimum average daily volume requirement of 100,000 shares. While you may elect a higher minimum requirement, this volume level has shown to meet the goal of assuring easy and quick entry and exit. The minimum average daily volume requirement is determined by applying a 50 day moving average to the volume.

The daily Power Spike Signal Generation Report will display the 50 day volume average.

Criteria #7: Stock Price between $5 and $25

Explanation: For short term trading purposes, this price range is optimal. Stocks below $5 are often far more volatile, easily subject to manipulation and difficult or impossible to margin. Stocks over $25 require too much price movement to generate an acceptable rate of return. The best return to movement rate is obtained with stocks that fall within the $5 - $25 price range.

The Power Spike is a remarkable and powerful pattern to trade. And our program is designed to provide optimal trade signals.

In addition to the detailed Power Spike information, the Power Spike Signal Generation Report also provides a Market Status summary. The single greatest factor to success is trading in harmony with the broad market. And the Power Spike Signal Generation Report will display the current condition of the broad market.

You'll know whether the market is in a confirmed up trend, confirmed down trend or in a state of divergence. You'll know the direction of the dominant and subordinate trend.

You'll know whether the market favors long trades or short trades.

Gain a substantial edge over the market and begin making consistent profits today with The Power Spike Signal Service.

For a very limited time only, we are going to slash our already ridiculously low subscription fee! But this special subscription rate won't last, so...
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If you act now you can become a member and receive all the exclusive benefits of The Power Spike Signal Service.

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