How to trade with an oscillator

[murthyavr]

Dear ST,

In one of the posts, you said that 30min chart is taken as the higher time-frame
for monitoring the change in the trend. Yes, it is in accordance with what you
said earlier also - if we are trading a 5min chart, a TF five or six times higher
will be the higher TF.

So, once the trend is identified on 30min chart, you take signals as per Stoch -
OB/OS signals as well as clear Stoch signals (the ones which satisfy the 6 qualifiers).

In this process, do you take care that the stoch on 30min TF is also in tune with
the 5min stoch chart? I mean, before you consider a clear stoch buy signal
from a 5min chart, do you make sure that there has been a bullish crossover of
stoch on a 30min chart? Or, simply take the signals as per 5min chart?

I hope I could put forth my question in an understandable way..

 

[rangarajan]

Dear ST,

In one of the posts, you said that 30min chart is taken as the higher time-frame
for monitoring the change in the trend. Yes, it is in accordance with what you
said earlier also - if we are trading a 5min chart, a TF five or six times higher
will be the higher TF.

So, once the trend is identified on 30min chart, you take signals as per Stoch -
OB/OS signals as well as clear Stoch signals (the ones which satisfy the 6 qualifiers).

In this process, do you take care that the stoch on 30min TF is also in tune with
the 5min stoch chart? I mean, before you consider a clear stoch buy signal
from a 5min chart, do you make sure that there has been a bullish crossover of
stoch on a 30min chart? Or, simply take the signals as per 5min chart?

I hope I could put forth my question in an understandable way..

murthy,atleast i am
It would be inteesting to c what Smart replies.
By the way,what happened to yr New thread on TD.

 

[murthyavr]

murthy,atleast i am
It would be inteesting to c what Smart replies.
By the way,what happened to yr New thread on TD.

Rangarajan,

Yes, let's see. ST is Smart enough to understand any type of question..

I am not trading on TD lines quite often nowadays. Let me see - if I gather enough
material and charts, I will start one during this weekend!

 

[Smart_trade]

Dear ST,
On daily stc still it is in sell sgnl, is it ok to take early stc buy sgnls on 30 min or 60 min rather than waiting for daily to give buy sgnl on stch.

regards,
anjanbm

anjanbm,

It really depends on what timeframe you trade as your trading timeframe.Talking about daytrading we are trading short term trends in the direction of medium term or intermediate trends....daily will give us long term trend. Even if long term trend is down as per daily timeframe, still within that there will be intermediate trends of 200 nifty points and we, as day traders or swing traders , cannot neglect a 200 nifty points move. So we trade minor trends in direction of intermediate trends to catch these up/down moves/swings on daily which manifest as trends on intermediate and short term timeframes.

Hope I am able to answer your question.

Smart_trade

 

[Smart_trade]

Dear ST,

In one of the posts, you said that 30min chart is taken as the higher time-frame
for monitoring the change in the trend. Yes, it is in accordance with what you
said earlier also - if we are trading a 5min chart, a TF five or six times higher
will be the higher TF.

So, once the trend is identified on 30min chart, you take signals as per Stoch -
OB/OS signals as well as clear Stoch signals (the ones which satisfy the 6 qualifiers).

In this process, do you take care that the stoch on 30min TF is also in tune with
the 5min stoch chart? I mean, before you consider a clear stoch buy signal
from a 5min chart, do you make sure that there has been a bullish crossover of
stoch on a 30min chart? Or, simply take the signals as per 5min chart?

I hope I could put forth my question in an understandable way..

Murthy,

I always keep the trend on longer timeframe in mind while taking trades on shorter timeframe. So if we are in clear uptrend in 30 min , we must take all buy signals on 5 min stochastics.....sell signals dont take in a trend. But when 30 shows the signs of going into a sideways trend, that is where you take both long and short signals from stochastics. Remember that stochastics is an oscillator and it will work great for both side trades only in sideways markets. This is where most traders make a mistake and they take a sell signal on stochastics when the 30 min is in uptrend and in initial stages of uptrend. These signals have hihh probability of failure......

I will observe stochastics on 30 to get an idea of where we are in the trend on 30.....when stochastics goes in OB/OS zones on 30 min timeframe, the market has a good probability of reversing its existing trend but remember that markets can continue being in OB/OS zones and still go in that direction for a long time.....so when I am looking for probable trend reversal, I look for stochastics on 30 and 5 both.....

Hope I have understood and answered your question.

Smart_tarde

 

[Smart_trade]

Rangarajan,

Yes, let's see. ST is Smart enough to understand any type of question..

I am not trading on TD lines quite often nowadays. Let me see - if I gather enough
material and charts, I will start one during this weekend!

ha ha ha....murthy ...actually smart in my ID pertains to my trades, not me....meaning I want my trades to be smart, I am in no way claiming that I am smart the secret is I am quite dumb and nowhere being "smart"...

Smart_trade

 

[murthyavr]

Murthy,

I always keep the trend on longer timeframe in mind while taking trades on shorter timeframe. So if we are in clear uptrend in 30 min , we must take all buy signals on 5 min stochastics.....sell signals dont take in a trend. But when 30 shows the signs of going into a sideways trend, that is where you take both long and short signals from stochastics. Remember that stochastics is an oscillator and it will work great for both side trades only in sideways markets. This is where most traders make a mistake and they take a sell signal on stochastics when the 30 min is in uptrend and in initial stages of uptrend. These signals have hihh probability of failure......

I will observe stochastics on 30 to get an idea of where we are in the trend on 30.....when stochastics goes in OB/OS zones on 30 min timeframe, the market has a good probability of reversing its existing trend.....so when I am looking for probable trend reversal, I look for stochastics on 30 and 5 both.....

Hope I have understood and answered your question.

Smart_tarde

Perfect, ST. Thank you.

It answers all my questions!!

 

[vssoma]

Murthy,

I always keep the trend on longer timeframe in mind while taking trades on shorter timeframe. So if we are in clear uptrend in 30 min , we must take all buy signals on 5 min stochastics.....sell signals dont take in a trend. But when 30 shows the signs of going into a sideways trend, that is where you take both long and short signals from stochastics. Remember that stochastics is an oscillator and it will work great for both side trades only in sideways markets. This is where most traders make a mistake and they take a sell signal on stochastics when the 30 min is in uptrend and in initial stages of uptrend. These signals have hihh probability of failure......

I will observe stochastics on 30 to get an idea of where we are in the trend on 30.....when stochastics goes in OB/OS zones on 30 min timeframe, the market has a good probability of reversing its existing trend but remember that markets can continue being in OB/OS zones and still go in that direction for a long time.....so when I am looking for probable trend reversal, I look for stochastics on 30 and 5 both.....

Hope I have understood and answered your question.

Smart_tarde

dear,
well said, i am also using stocha....i experienced most o f the time same in my live trading...

 

[timepass]

Today turned out to be a fine day to trade with oscillators

Wish I had the guts to take up the oscillators' call .. missed out the big moves, ended the day with small profits in 5400 puts, which could've been at least 5 times.

 

[murthyavr]

Today turned out to be a fine day to trade with oscillators

Wish I had the guts to take up the oscillators' call .. missed out the big moves, ended the day with small profits in 5400 puts, which could've been at least 5 times.

TP,

Where was an oscillator call at all, on your 30min chart?

%D moved from out of OB region, after staying for 8 bars in OB zone.
So, that was not a signal to sell - as per ST's qualifiers.

The only indication, according to me was the price action. If you take 30min
chart, it made a low (9:45), couldn't make a higher high, instead - made a
lower low (12:15). With this, the uptrend was doubtful.

On a 5min chart, the stoch gave a clear sell signal at 13:15 and yes! it was
the ultimate 140+ points signal !!