The more things change, the more they stay the same

Posted on by The INO.com Team

The more things change, the more they stay the same

Last month, on February 10th to be exact, I shared with you the "52-week Friday rule". This was a rule that I learned over 3 decades ago in the markets.

In case you missed this video, which you can watch here, I show you that when a market is closing at a 52-week high on a Friday, you should go long. The rest of the rules are in this video that you should watch as it has been working with amazing regularity.

Apple fit the rules perfectly last Friday 3/26 at $230.97. This was an all time high close for Friday in this stock. The rules stated in the video say you should exit this market on the opening on Tuesday, the 30th of March. Having done so you have exited at $236.67 for gain of $5.70 before commissions. This represented a little over a 2% gain in just over 6 hours of market time with very little risk.

So when I hear people say that things have changed in the market and that they are completely different from what they used to be, I have to disagree. I think this is a good example why.

I learned this trading secret from a trader named Bill... I am keeping his last name private as Bill is a very low-key guy and shuns any publicity.

Using his special trading technique, Bill made millions and millions of dollars from his office. The best part is that this technique is still working more than 30 years after I learned about it. Now it's time for the next generation of traders to learn Bill's secret.

Bill didn't even have a name for this killer trading technique. I named it "The 52-week new highs on Friday rule".

As always, our videos are free to watch and there are no registration requirements. Have you traded using the "52-week Friday rule"? If so, let us know how it went, but regardless of whether you have or not, leave your comments below.

All the best,
Adam Hewison
President, INO.com
Co-creator, MarketClub

48 thoughts on “The more things change, the more they stay the same”

  1. Very interesting concept, Adam. Thanks for sharing!

    I like how clear/easy the rules are...which makes back testing and automating the setup extremely easy.

    Cheers!

    Frank

  2. Hi

    Do you look at the 52 week high on that contract, or the 52 week high of the forward contracts for that comodity?

    Thanks!

  4. sounds good!
    if all parties are willing to stick to their positions during the weekend (=close at the high) there is a more than fair change the market will rise on monday
    thanks Adam

    Lisa

  6. This is cool, but a shorter catchy name might help us remember it for next time. And if the name is cool and we share it with our friends, we'll sound smart.

    1. Hey Justin,

      What name are you referring to? The video name or the blog name? Thanks for your clarificaiton.

      Thanks,

      Lindsay Bittinger
      INO.com & MarketClub

  7. Adam, when you sell on Tuesday do you put in a market order before the open, or do you take your chances w/ a limit order?

    Roger

  8. MRRI brings up a good point. Every Friday there could be literally hundreds of stocks at a 52-week high. Are there processes to be used to pinpoint which of the hundreds of opportunities would offer the best chance of being successful on the trade? Can you offer some guidelines on how to select the best stock, future, or forex market from the multiple opportunities you'd come across every Friday?

    1. J Follis,

      Thank you for your feedback.

      One of the rules I like to use is to be in big markets with big volume. It also helps if they have big names.

      In futures, I like to stick with the markets like gold, crude oil, soybeans, wheat, and several other major markets.

      I hope this helps.

      All the best,
      Adam

  11. Adam,
    Could you use the smart scan feature in Market Club to find new 52 week highs? How often are the scans updated? In other words if I run the scan a half hour before the market closes how current is the information.
    Thanks

    1. Brian,

      Good question.

      Absolutely, you can use the Smart scan feature on multiple that's what it is designed to do spot new 52 week highs or new lows.

      You can run this 15 minutes before the close.

      All the best,
      Adam

  12. Adam, I do appologise, but I didn't understand about the 52 week low - if the market makes a 52 week low on a Friday, do I buy or sell?
    Do I then close on the opening of Tuesday?

    Please let us know.

    Many thanks

    1. Ivan,

      Thank you for your feedback.

      If a market is making a 52 week low on a Friday you would want to short this market and then cover the position on the opening on Tuesday.

      I hope this answers your questions.

      All the best,
      Adam

  13. Sounds like a great way to get a good trade but as I've only ever traded eminis on the indeces I have no idea how to do this. Can I trade from the dom? What broker would I use? Do the electronic platforms have the facility to have a 'watch list'? etc, etc.

    1. Cassi,

      Thank you for your feedback.

      This approach does not necessarily work well with indices. The other questions that you are asking are more related to a brokerage company and we are not a brokerage company.

      I hope my answer helps you and puts you on your road to success.

      All the best,
      Adam

    1. John,

      Thank you for your feedback.

      You buy on Friday just before the close.

      Let me explain how the 52 week rule works. If a market is making a new 52-week high on a Friday and closing close to it's best levels of the day you want to take a long position home for the weekend. You would exit this position on the opening Tuesday morning. If Monday is a holiday then you would exit the position on a Wednesday morning on the opening.

      You determine how a market is making a 52-week high by just looking back 52 weeks. I know it sounds simple but that's how it is done.You also want to look at the daily charts and not the weeklies for this type of trading.

      Now, if I market closes at a new high the next week you follow the same procedure. You buy on a Friday at or near the close knowing that the market is going to close a new high ground and then you exit the position on the opening on Tuesday morning.

      This approach does not work well with indexes like the S&P 500, NASDAQ, and DOW. These are indices and are made up of many different stocks. What you are looking for is a stock, futures or forex market that is closing in new 52-week high highs for the week.

      This approach is not a guarantee that every trade will be successful, however, it does place the odds clearly in your corner.

      I hope this clears up any further questions you might have on this trading rule.

      All the best,
      Adam

      1. Adam. You say this 52 week rule applies to the market but not the Dow, S&P or Nasdaq. What market are you refering to then? I hardly think the NYSE or Russel 2000 would be any better. I would think this rule could apply to a stock and has nothing to do with the market in general.

        1. Shelly,

          Thank you for your feedback.

          I'm not such a strong believer in using this rule based on any of the indices. It does however work well with forex,futures and individual stocks.

          All the best,
          Adam

  15. Hi Adam

    Based on your experience what would you consider an appropriate Stoploss for such trades on Mondays.

    Thanks

    1. Sham,

      Thank you for your feedback.

      The reality is if the market does not follow through on Monday you should exit this position early on. Normally, the markets follow through on Monday and again on Tuesday.

      I hope this helps.

      All the best,
      Adam

  17. Great thread.

    Thanks for your feedback Adam. My apologies on the placement of my first post, your note re: DOW was unfortunately not visible when I posted 🙂

    Cheers

  18. So when is your actual buy? Friday, or Monday?

    If you buy Friday..when...5 minutes before market close? Mid day, as soon as the new high is hit?
    If you buy mid-trade day as soon as it hits a new high, the market could reverse.
    If you wait for the close, to let the candle form, you either have to buy after market or monday morning.

    Please be a little clearer as to when the buy occurs, we know the sell is on Tuesday open.
    Thanks

    1. Alan,

      Thank you for your feedback.

      You buy on Friday just before the close.

      Let me explain how the 52 week rule works. If a market is making a new 52-week high on a Friday and closing close to it's best levels of the day you want to take a long position home for the weekend. You would exit this position on the opening Tuesday morning. If Monday is a holiday then you would exit the position on a Wednesday morning on the opening.

      You determine how a market is making a 52-week high by just looking back 52 weeks. I know it sounds simple but that's how it is done.You also want to look at the daily charts and not the weeklies for this type of trading.

      Now, if I market closes at a new high the next week you follow the same procedure. You buy on a Friday at or near the close knowing that the market is going to close a new high ground and then you exit the position on the opening on Tuesday morning.

      This approach does not work well with indexes like the S&P 500, NASDAQ, and DOW. These are indices and are made up of many different stocks. What you are looking for is a stock, futures or forex market that is closing in new 52-week high highs for the week.

      This approach is not a guarantee that every trade will be successful, however, it does place the odds clearly in your corner.

      I hope this clears up any further questions you might have on this trading rule.

      All the best,
      Adam

  19. Sorry, I don't understand the rule - where or how can I find 52-week high on the chart (Forex)?

    1. Serg,

      Thank you for your feedback.

      You can find everything on MarketClub.com

      Let me explain how the 52 week rule works. If a market is making a new 52-week high on a Friday and closing close to it's best levels of the day you want to take a long position home for the weekend. You would exit this position on the opening Tuesday morning. If Monday is a holiday then you would exit the position on a Wednesday morning on the opening.

      You determine how a market is making a 52-week high by just looking back 52 weeks. I know it sounds simple but that's how it is done.You also want to look at the daily charts and not the weeklies for this type of trading.

      Now, if I market closes at a new high the next week you follow the same procedure. You buy on a Friday at or near the close knowing that the market is going to close a new high ground and then you exit the position on the opening on Tuesday morning.

      This approach does not work well with indexes like the S&P 500, NASDAQ, and DOW. These are indices and are made up of many different stocks. What you are looking for is a stock, futures or forex market that is closing in new 52-week high highs for the week.

      This approach is not a guarantee that every trade will be successful, however, it does place the odds clearly in your corner.

      I hope this clears up any further questions you might have on this trading rule.

      All the best,
      Adam

  20. This is a nice illustration of a strategy that seems to be effective most of the time. But it is of little use AFTER the fact. Unless an average trader has expensive software (and knowhow) to scan for such possibilities (see comment by "Newcgeoman") .... the information is not time effective. It would take hours to search for opportunities that look promising as there were 598 new Hi's last Thursday evening on the DJIA and Nasdaq combined.

    1. Mrrin.

      Thank you for your feedback.

      It is not that difficult with MarketClub.com.

      Let me explain how the 52 week rule works. If a market is making a new 52-week high on a Friday and closing close to it's best levels of the day you want to take a long position home for the weekend. You would exit this position on the opening Tuesday morning. If Monday is a holiday then you would exit the position on a Wednesday morning on the opening.

      You determine how a market is making a 52-week high by just looking back 52 weeks. I know it sounds simple but that's how it is done.You also want to look at the daily charts and not the weeklies for this type of trading.

      Now, if I market closes at a new high the next week you follow the same procedure. You buy on a Friday at or near the close knowing that the market is going to close a new high ground and then you exit the position on the opening on Tuesday morning.

      This approach does not work well with indexes like the S&P 500, NASDAQ, and DOW. These are indices and are made up of many different stocks. What you are looking for is a stock, futures or forex market that is closing in new 52-week high highs for the week.

      This approach is not a guarantee that every trade will be successful, however, it does place the odds clearly in your corner.

      I hope this clears up any further questions you might have on this trading rule.

      All the best,
      Adam

  21. Great Adam, thanks. What about if its a long weekend though like this weekend with Good Friday? What if a stock makes a new high on Thursday before a holiday - it sounds a little more risky. Do you have a rule for holiday weekends?

    1. Keith,

      Thank you for your feedback.

      Yes, there is a rule. See below.

      Let me explain how the 52 week rule works. If a market is making a new 52-week high on a Friday and closing close to it's best levels of the day you want to take a long position home for the weekend. You would exit this position on the opening Tuesday morning. If Monday is a holiday then you would exit the position on a Wednesday morning on the opening.

      You determine how a market is making a 52-week high by just looking back 52 weeks. I know it sounds simple but that's how it is done.You also want to look at the daily charts and not the weeklies for this type of trading.

      Now, if I market closes at a new high the next week you follow the same procedure. You buy on a Friday at or near the close knowing that the market is going to close a new high ground and then you exit the position on the opening on Tuesday morning.

      This approach does not work well with indexes like the S&P 500, NASDAQ, and DOW. These are indices and are made up of many different stocks. What you are looking for is a stock, futures or forex market that is closing in new 52-week high highs for the week.

      This approach is not a guarantee that every trade will be successful, however, it does place the odds clearly in your corner.

      I hope this clears up any further questions you might have on this trading rule.

      All the best,
      Adam

  22. Adam, not clear on where I start to count from to get to my 52 week friday? what chart am I using the weekly or daily. Also in your example of sugar your first trade set-up was august 7th and fifteen days later was the second trade. How was that a 52 week high from the first trade.

    1. Ron,

      Thank you for your feedback.

      See the rest of my comment below.

      Let me explain how the 52 week rule works. If a market is making a new 52-week high on a Friday and closing close to it's best levels of the day you want to take a long position home for the weekend. You would exit this position on the opening Tuesday morning. If Monday is a holiday then you would exit the position on a Wednesday morning on the opening.

      You determine how a market is making a 52-week high by just looking back 52 weeks. I know it sounds simple but that's how it is done.You also want to look at the daily charts and not the weeklies for this type of trading.

      Now, if I market closes at a new high the next week you follow the same procedure. You buy on a Friday at or near the close knowing that the market is going to close a new high ground and then you exit the position on the opening on Tuesday morning.

      This approach does not work well with indexes like the S&P 500, NASDAQ, and DOW. These are indices and are made up of many different stocks. What you are looking for is a stock, futures or forex market that is closing in new 52-week high highs for the week.

      This approach is not a guarantee that every trade will be successful, however, it does place the odds clearly in your corner.

      I hope this clears up any further questions you might have on this trading rule.

      All the best,
      Adam

  23. Gene,

    You are right on the money. You do the exact same thing when a market makes a 52 week low.

    All the best,
    Adam

  24. Adam,

    Just wonder what are your thoughts on the reverse rule (52wk low).

    If on Friday the price closes on a 52 week low, short it and get out on Tuesday.

    Thanks.

    1. Owen,

      Thank you for your feedback.

      I hope my comments below explain everything.

      Let me explain how the 52 week rule works. If a market is making a new 52-week high on a Friday and closing close to it's best levels of the day you want to take a long position home for the weekend. You would exit this position on the opening Tuesday morning. If Monday is a holiday then you would exit the position on a Wednesday morning on the opening.

      You determine how a market is making a 52-week high by just looking back 52 weeks. I know it sounds simple but that's how it is done.You also want to look at the daily charts and not the weeklies for this type of trading.

      Now, if I market closes at a new high the next week you follow the same procedure. You buy on a Friday at or near the close knowing that the market is going to close a new high ground and then you exit the position on the opening on Tuesday morning.

      This approach does not work well with indexes like the S&P 500, NASDAQ, and DOW. These are indices and are made up of many different stocks. What you are looking for is a stock, futures or forex market that is closing in new 52-week high highs for the week.

      This approach is not a guarantee that every trade will be successful, however, it does place the odds clearly in your corner.

      I hope this clears up any further questions you might have on this trading rule.

      All the best,
      Adam

  26. Newcgeoman,

    Thanks for your feedback.

    This rule works best on futures, stocks and forex, not of indices like the DOW and SP500.

    Thanks,
    Adam

  27. This sounds like a very simple rule to back test.

    Out of interest, I've run it quickly on DJI buy friday C>52 week high sell monday close. 32 instances, 13 winners, 19 losers profit=-2.97%.

    1. Good comment Newcgeoman. Because rules are for fools.
      It sets up a mental bias that very often bites traders in the ass. So many of these trader alerts are like organized religion...meaning when traders don't have a relationship with the market (God) they default to religious belief (concepts). One is real the later is imaginary and powerless.

      1. Angelo, I know it is a bit off the subject, but what a great take on religion, a set of man made rules and regulations that produce bondage, but knowing God produces freedom. And yes, it is true with the market...the only difference is the market does have a personality, and does change, God has a personality, but does not change. The comment that it does not work on the indices is probably accurate, use it only on stocks, and it will probably hold true, and then again, it may only work on high volume stocks.

  28. I guess I'm a bit of a dummy, but how can you buy a stock after it closes at its 52-week high, isn't the market closed?

    1. Rob,

      Thank you for your feedback.

      Let me explain how the 52 week rule works. If a market is making a new 52-week high on a Friday and closing close to it's best levels of the day you want to take a long position home for the weekend. You would exit this position on the opening Tuesday morning. If Monday is a holiday then you would exit the position on a Wednesday morning on the opening.

      You determine how a market is making a 52-week high by just looking back 52 weeks. I know it sounds simple but that's how it is done.You also want to look at the daily charts and not the weeklies for this type of trading.

      Now, if I market closes at a new high the next week you follow the same procedure. You buy on a Friday at or near the close knowing that the market is going to close a new high ground and then you exit the position on the opening on Tuesday morning.

      This approach does not work well with indexes like the S&P 500, NASDAQ, and DOW. These are indices and are made up of many different stocks. What you are looking for is a stock, futures or forex market that is closing in new 52-week high highs for the week.

      This approach is not a guarantee that every trade will be successful, however, it does place the odds clearly in your corner.

      I hope this clears up any further questions you might have on this trading rule.

      All the best,
      Adam

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