How to trade with an oscillator

[krish4166]

You can find out the merits and de-merits for yourself.
After seeing EOD graph ,people come under the impression that trading is
the easiest job on the earth to do, but it is one of the toughest jobs.

It is one of the toughtest jobs right.

 

[Smart_trade]

ST dada suppose stoch is neither in overbought nor over sold what do I do? Sit idle? Thanks in advance. PR.

Traders use oscillators in many ways....some will go long when oscillator crosses 50 % line from below and short when it crosses from above....some will trade only divergences...some will trade only when market is in sideways mode...some trade the hook on the oscillator...so all depends on what one is comfortable with ....( for hook....read Anti method in Street Smarts book....beautifully explained there.)

Take one area and specialise in that....so that you know all the nuances of the indicator in that area....

Smart_trade

 

[Smart_trade]

ST
when we have different values on stchs from different softwares, will this not affect our trading and also how to know which is software is giving correct values ?

Krish,

There is nothing absolutely right or wrong in trading....a person using different parameters will have different signals but if he sticks to that everytime it eventually levels out....and it makes money. Trading is neither white, nor black...it is gray...some find it more white than black ,some find it more black than white...some people use 15-3-3 some use 5-5-5 setting....who is right ? Probably all are right if they do it consistantly....

Smart_trade

 

[columbus]

Krish,

There is nothing absolutely right or wrong in trading....a person using different parameters will have different signals but if he sticks to that everytime it eventually levels out....and it makes money. Trading is neither white, nor black...it is gray...some find it more white than black ,some find it more black than white...some people use 15-3-3 some use 5-5-5 setting....who is right ? Probably all are right if they do it consistantly....

Smart_trade

Hi Smart_trade,

.....one setting perfectly working for a day ,may not work at all next day...

 

[Smart_trade]

Hi Smart_trade,

.....one setting perfectly working for a day ,may not work at all next day...

Hello columbus,

As EagleOne rightly pointed out, one has to try various combinations and decide a setting which captures maximum trades for the timeframe he wants to trade and frequency of trades he wants to have. Smaller settings will give too many trades...many of them small ones....larger setting give less trades but larger moves.

I have been observing stochastics for many years and my experience says that a indicator working fine for one day and not working at all for the next does not happen unless the market has changed totally in one day which is unlikely.

If you see this thread we have kept the stochastics parameters same from the beginning of this thread...never changed but it still gives good trades. For daytrades I was using 5/10 min timeframe and for swing trades I used 30/60 min timeframe and it still gives good trades on this same parameter.

Smart_trade

 

[Piuvbn]

Hello columbus,

As EagleOne rightly pointed out, one has to try various combinations and decide a setting which captures maximum trades for the timeframe he wants to trade and frequency of trades he wants to have. Smaller settings will give too many trades...many of them small ones....larger setting give less trades but larger moves.

I have been observing stochastics for many years and my experience says that a indicator working fine for one day and not working at all for the next does not happen unless the market has changed totally in one day which is unlikely.

If you see this thread we have kept the stochastics parameters same from the beginning of this thread...never changed but it still gives good trades. For daytrades I was using 5/10 min timeframe and for swing trades I used 30/60 min timeframe and it still gives good trades on this same parameter.

Smart_trade

The confident one(expert,experienced etc.)is always cool,his word gives assurance when gloom all around.Wish I new something worthy that I could share.Thanks whole heartedly.PR

 

[timepass]

A bullish hidden divergence is when we get higher lows in price and lower lows on oscillator. This is a continuation pattern and the market is in uptrend...it makes corrective downmove and now is ready to resume its uptrend again and it is a continuation pattern rather than a reversal pattern in normal bullish divergence as explained above.

Smart_trade

ST, could this be an example of Bullish Hidden Divergence ?

 

[Smart_trade]

ST, could this be an example of Bullish Hidden Divergence ?

Hmmmm...not really,TP. For observing divergence we compare oscillator values at clearly visible turning points. In the line marked by you,there is no clear pivot low for such comparison. If you compare with the lowest point of the chart, then there is no bullish hidden divergence....so not a good case in my view....

ST

 

[EagleOne]

Krish
If you happen to be around, check out some charts on your computer. You will see how the gap-down opening today did some interesting things to Stochs. It will be a great learning for you, as it was for me!

Tell ST about your observations. He definitely will have more insights to add to your experience.

 

[krish4166]

ST ,Eagle one
Because of gap down today neither bought nor sold and for me no clear signals and nearly 6 hours I have to sit quietely without trading. And how u have traded today plz post.