How to trade with an oscillator

[cpt.rajesh14]

dear ST,

Shall we use the same settings for commodity day trading?

Regards,
M.R.K

 

[poortrader]

A hidden divergence on Stoch today. Comments from seniors please

 

[poortrader]

Dear Poor(rich already,
Can u pl tell me the steps to download this pdf file from this site.
I donot find any download button in the site.
Is it only for paid members

It is there, go to bottom of page, big buttons are there click on slow speed to download

 

[Smart_trade]

dear ST,

Shall we use the same settings for commodity day trading?

Regards,
M.R.K

Try various settings to see which settings suit the most to the commodity you want to trade. The settings should catch 75-80 % of the trades by going into overbought / oversold region You can also experiment with the timeframe which suits the commodity the most.

ST

 

[srivelkalki]

:clapping::clapping::clapping::clapping:

I would like to share an important phenomenon regarding oscillator overbought/oversold conditions. Whenever an oscillator like Stochastics,( or even RSI,ROC etc ) stays above the overbought limit for more than 5 bars without taking a dip from overbought to neutral zone....the market has a lot of steam left further to go up, market then continues upward journey,then comes down,then goes into overbought zone again but shows negative divergence and then only it comes down...till then it keeps making higher tops. This is a very strong bullish signal to trade.....

Mirror image for oscillator staying in oversold region for more than 5 bars...

The above phenomenon was what was happening towards the later part of the session yesterday (26-06-09).... I traded this observation yesterday and thought I will share with all....


Smart_trade

 

[Smart_trade]

This observation and oscillator qualifiers are based on the research of Thomas DeMark....I have mentioned that in the thread. So I take no credit for this brilliant observation , I only traded the same and shared it here with all our friends....so that they can use the same in their trades.

Smart_trade

 

[murthyavr]

Dear ST,

Sometime back, there was a reference about the Hook (anti) method and you
assured us that you will write something about it..

Can you please find some time to post on it, preferably with few charts?

Thanks..

 

[balasoft80]

Hello ST,
Could you please explain me how to handle the following two scenarios?

Scenario 1: Price taking high and stocha taking low --------ended in down
Scenario 2: Price taking high and stocha taking low --------ended in up

please let me know we can do if it breaks PL though it has stayed more than 5 bars in the OB region? Couple of times recently observed this.

Thanks
Bala

 

[timepass]

Bala, not answering for ST but culling from his teachings in this thread...

Scenario 1: Price taking high and stocha taking low --------ended in down

Ans : This is in line with the divergence.

Scenario 2: Price taking high and stocha taking low --------ended in up

Ans : In this chart, also draw lines along the bottom of the price and stochs, and you will find that price lows remain flattish (11.30 onwards), the stoch lows are rising, and that's a hidden bullish divergence.

Hello ST,
Could you please explain me how to handle the following two scenarios?

Thanks
Bala

But even I am a bit how to handle the 5 bars OB scenarios, so I avoid them altogether

 

[balasoft80]

Thanks much for your reply. The reason I didn't draw line at the bottom is, stochastic never touched the OS region in the scenario 2. Did you happen to notice that?

Please consider the one more example for scenario 2. Thanks much