Uploaded July 2026 | Updated September 2026, 2 weeks ago
* **Main Topics Covered:** Money Flow Index (MFI) formula & mechanics, Alexander Elder's divergence concept, the "Railroad Tracks" trend strategy, Steve Bigelow's candlestick patterns (Candle Profit Systems V3), individual stock chart reviews, and risk management rules.
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### 1. Money Flow Index (MFI) Overview & Calculation
Created by Gene Quong and Avrum Sowdaw, the **Money Flow Index (MFI)** is a momentum oscillator similar to the Relative Strength Index (RSI), but it explicitly incorporates **volume** into its calculation.
* **Step 1: Typical Price**
$$\text{Typical Price} = \frac{\text{High} + \text{Low} + \text{Close}}{3}$$
* **Step 2: Raw Money Flow**
$$\text{Money Flow} = \text{Typical Price} \times \text{Volume}$$
* **Step 3: Positive & Negative Flow Determination**
* **Positive Money Flow:** Sum of Money Flow on days where today's Typical Price is greater than yesterday's Typical Price over a 14-period window.
* **Negative Money Flow:** Sum of Money Flow on days where today's Typical Price is less than yesterday's Typical Price over a 14-period window.
* **Step 4: Money Ratio & Index Normalization**
$$\text{Money Ratio} = \frac{\text{Positive Money Flow}}{\text{Negative Money Flow}}$$
$$MFI = 100 - \frac{100}{1 + \text{Money Ratio}}$$
#### Key MFI Trading Signals:
* **Overbought / Oversold Extremes:**
* **Above 80:** Overbought warning zone (potential pullback/reversion to the mean).
* **Below 20:** Oversold zone (potential reversal).
* *Rule of thumb:* Always wait for price confirmation, as strong trends can stay overbought/oversold longer than expected.
* **Indicator Divergence:**
* Referencing Dr. Alexander Elder (*"Indicator divergence is the most powerful signal in technical analysis"*).
* Highlighted on **GE**: Price made higher highs while MFI peaked lower (-4%), signaling weakening volume momentum and predicting a pullback.
---
### 2. "Railroad Tracks" Uptrend Exploration Strategy
A MetaStock exploration framework designed by Maverick to isolate stocks in a pervasive, steady uptrend:
* **Moving Average Alignment Order:**
8 EMA (T-Line) is above 20 SMA, which is above 50 SMA, which is above 200 SMA
* **Core Indicators:**
* **8 EMA (T-Line):** Developed by Rick Sadler (student of Steve Bigelow). Acts as dynamic support and a strict stop-loss trigger.
* **50 & 200 SMA:** Institutional reference lines acting as major macro support and resistance.
* **Filter Conditions:** Requires smooth spacing (no overlapping/whipsaws) and consistent upward trajectory.
---
### 3. Steve Bigelow’s Candlestick Patterns (Candle Profit Systems)
Scans apply Steve Bigelow's high-probability bullish patterns strictly to stocks already meeting the "Railroad Tracks" trend criteria:
* **Doji / Series of Indecision:** Dojis represent indecision. A cluster of Dojis indicates building price compression; the breakout following indecision tends to be explosive.
* **Doji Best Friend:** A Doji followed immediately by a gap-up opening and strong positive candle. Enhanced when gapping/closing above the 8 EMA T-Line.
* **Kicker / Trend Kicker:** A sharp 2-bar reversal pattern where a bearish day is followed by a gap-up open above the prior body and strong upward continuation.
* **Flutter Kicker:** A 3-bar variation featuring a down day, a Doji in the middle, and a gap-up Kicker bar.
* **Other Scanned Patterns:** Bobble, Frypan Bottom, Doji Sandwich, Dumpling Top, Muffin.
---
### 4. Stock Chart Reviews & Specific Scans
| Ticker | Pattern / Setup | Session Analysis & Action |
| --- | --- | --- |
| **VOYA** | Railroad Tracks / Dojis | In tracks for 27 days; showing indecision/Dojis at highs. Passed on buying until a clear decision bar forms. |
| **HK** *(Halcon)* | Doji Best Friend | Formed dumpling top pulling back to test the 8 EMA T-Line. |
| **HUM** *(Humana)* | Trend Kicker | Bought in session after 50/200 SMA cross. Testing overhead resistance level. |
| **EIX** | Flutter Kicker | Broke resistance above T-Line; holding above underlying support. |
| **DK** | Kicker | Formed kicker and gapped up; actively holding with a tight trailing stop. |
| **PBF** | Doji Sandwich / Bullish Trend | Strong parabolic upward expansion following bullish reversal. |
| **PSO** | Kicker into All-Time Highs | Gapped into new highs, but opened weak the next day; caution on extended gap opens. |
---
### 5. Risk Management Guidelines
* **Golden Rule:** *"Don't eat like a butterfly and poop like an elephant."*
* **Capital Protection:** Preserving capital takes priority over chasing profits.
* **Systemic Exit Rule:** A daily close below the **8 EMA (T-Line)** serves as an immediate trigger to exit active long positions.
* **Execution Discipline:** You can always buy back in if proven wrong, but taking small, timely exits prevents catastrophic drawdowns.
* **Main Topics Covered:** Money Flow Index (MFI) formula & mechanics, Alexander Elder's divergence concept, the "Railroad Tracks" trend strategy, Steve Bigelow's candlestick patterns (Candle Profit Systems V3), individual stock chart reviews, and risk management rules.
---
### 1. Money Flow Index (MFI) Overview & Calculation
Created by Gene Quong and Avrum Sowdaw, the **Money Flow Index (MFI)** is a momentum oscillator similar to the Relative Strength Index (RSI), but it explicitly incorporates **volume** into its calculation.
* **Step 1: Typical Price**
$$\text{Typical Price} = \frac{\text{High} + \text{Low} + \text{Close}}{3}$$
* **Step 2: Raw Money Flow**
$$\text{Money Flow} = \text{Typical Price} \times \text{Volume}$$
* **Step 3: Positive & Negative Flow Determination**
* **Positive Money Flow:** Sum of Money Flow on days where today's Typical Price is greater than yesterday's Typical Price over a 14-period window.
* **Negative Money Flow:** Sum of Money Flow on days where today's Typical Price is less than yesterday's Typical Price over a 14-period window.
* **Step 4: Money Ratio & Index Normalization**
$$\text{Money Ratio} = \frac{\text{Positive Money Flow}}{\text{Negative Money Flow}}$$
$$MFI = 100 - \frac{100}{1 + \text{Money Ratio}}$$
#### Key MFI Trading Signals:
* **Overbought / Oversold Extremes:**
* **Above 80:** Overbought warning zone (potential pullback/reversion to the mean).
* **Below 20:** Oversold zone (potential reversal).
* *Rule of thumb:* Always wait for price confirmation, as strong trends can stay overbought/oversold longer than expected.
* **Indicator Divergence:**
* Referencing Dr. Alexander Elder (*"Indicator divergence is the most powerful signal in technical analysis"*).
* Highlighted on **GE**: Price made higher highs while MFI peaked lower (-4%), signaling weakening volume momentum and predicting a pullback.
---
### 2. "Railroad Tracks" Uptrend Exploration Strategy
A MetaStock exploration framework designed by Maverick to isolate stocks in a pervasive, steady uptrend:
* **Moving Average Alignment Order:**
8 EMA (T-Line) is above 20 SMA, which is above 50 SMA, which is above 200 SMA
* **Core Indicators:**
* **8 EMA (T-Line):** Developed by Rick Sadler (student of Steve Bigelow). Acts as dynamic support and a strict stop-loss trigger.
* **50 & 200 SMA:** Institutional reference lines acting as major macro support and resistance.
* **Filter Conditions:** Requires smooth spacing (no overlapping/whipsaws) and consistent upward trajectory.
---
### 3. Steve Bigelow’s Candlestick Patterns (Candle Profit Systems)
Scans apply Steve Bigelow's high-probability bullish patterns strictly to stocks already meeting the "Railroad Tracks" trend criteria:
* **Doji / Series of Indecision:** Dojis represent indecision. A cluster of Dojis indicates building price compression; the breakout following indecision tends to be explosive.
* **Doji Best Friend:** A Doji followed immediately by a gap-up opening and strong positive candle. Enhanced when gapping/closing above the 8 EMA T-Line.
* **Kicker / Trend Kicker:** A sharp 2-bar reversal pattern where a bearish day is followed by a gap-up open above the prior body and strong upward continuation.
* **Flutter Kicker:** A 3-bar variation featuring a down day, a Doji in the middle, and a gap-up Kicker bar.
* **Other Scanned Patterns:** Bobble, Frypan Bottom, Doji Sandwich, Dumpling Top, Muffin.
---
### 4. Stock Chart Reviews & Specific Scans
| Ticker | Pattern / Setup | Session Analysis & Action |
| --- | --- | --- |
| **VOYA** | Railroad Tracks / Dojis | In tracks for 27 days; showing indecision/Dojis at highs. Passed on buying until a clear decision bar forms. |
| **HK** *(Halcon)* | Doji Best Friend | Formed dumpling top pulling back to test the 8 EMA T-Line. |
| **HUM** *(Humana)* | Trend Kicker | Bought in session after 50/200 SMA cross. Testing overhead resistance level. |
| **EIX** | Flutter Kicker | Broke resistance above T-Line; holding above underlying support. |
| **DK** | Kicker | Formed kicker and gapped up; actively holding with a tight trailing stop. |
| **PBF** | Doji Sandwich / Bullish Trend | Strong parabolic upward expansion following bullish reversal. |
| **PSO** | Kicker into All-Time Highs | Gapped into new highs, but opened weak the next day; caution on extended gap opens. |
---
### 5. Risk Management Guidelines
* **Golden Rule:** *"Don't eat like a butterfly and poop like an elephant."*
* **Capital Protection:** Preserving capital takes priority over chasing profits.
* **Systemic Exit Rule:** A daily close below the **8 EMA (T-Line)** serves as an immediate trigger to exit active long positions.
* **Execution Discipline:** You can always buy back in if proven wrong, but taking small, timely exits prevents catastrophic drawdowns.
