Originally Posted by
shawn_molodow
Hi Mike,
I thought the overall failure rate of all FTD's (regardless of DD's) was around 60-65%.
Last Th, Jun 21's DD would have been a d4 DD.
The high failure rate stats you cite for DD's on d1, d2, and d3 are certainly consistent with everything I heave read or heard on the subject from you and others (e.g. Minervini, Zanger, etc)...
But, mathematically, a 30% failure rate relating to a d4 or d5 DD would actually be much better than the *average* FTD.
30% seems too high to me, I would have guessed d4 or d5 DD would lead to something like a 70-75% failure rate?
Assuming 30% is the correct number, what am I missing?
Thanks,
Shawn
Shawn,
You are right that the overall failure rate is high for any FTD when the criterial for failure is a rally where the market does not go up 10% or more from the FTD and the rally last at least 5 weeks which is the criterial I usually use. IBD didn't disclose their criterial which is obviously looser. But both sets of data show extremely high failure rates for distribution very close to the FTD.
Mike Scott
Cloverdale, CA