How to trade with an oscillator

[Smart_trade]

Hi ST,
Here is another small clarifications. Please let me know your thoughts

Thanks
Bala

Short the low of that small red bar ( next to small green bar )as this is the bar which is giving first downclose after stochastics has come out of OB zone.......that is a correct entry as per the method.

ST

 

[balasoft80]

Hi ST,
Actually we are using 8,3,4 as parameters for Stochastic. So stochastic will be calculated highest high of last 8 bars and lowest low last 8 bars. Hence, is it good idea to count from the bar one in gap up/down days like today. I believe that counting from bar 9 would be the perfect but i am not sure. Could you please provide some insight on this?

Thanks for you time

Thanks
Bala

 

[Smart_trade]

Hi ST,
Actually we are using 8,3,4 as parameters for Stochastic. So stochastic will be calculated highest high of last 8 bars and lowest low last 8 bars. Hence, is it good idea to count from the bar one in gap up/down days like today. I believe that counting from bar 9 would be the perfect but i am not sure. Could you please provide some insight on this?

Thanks for you time

Thanks
Bala

Bala,

Today the opening gap was not much...just 10-15 points in Nifty Futures. But when we have a large gap, the stochastics gets distorted. That is why in case of large gap we wait for some initial period so that the oscillator comes to "its normal behaviour". Starting from 1st bar after the gap means wait for 8 bars and start following oscillator readings from 9th bar onwards,and that is what the cooling period does.

Smart_trade

 

[poortrader]

Live nifty action
1)normal divergence observed but downside is very strong, so could not go up
2) look at intraday gaps: high probability of bearishness
3) if we observe volumes of last few days in nifty it is showing waning signs with up bars on daily tf

@ seniors, please come up with your critique

 

[poortrader]

alert: negative hidden divergence with bearish background

 

[timepass]

alert: negative hidden divergence with bearish background

Is the negative divergence negated now, with 1315-1320 candle ?? There is also a bullish pattern on the candlesticks.

 

[poortrader]

Is the negative divergence negated now, with 1315-1320 candle ?? There is also a bullish pattern on the candlesticks.

yes negative div negated, we can't trade divergence unless we get confirmation, which is the rule, many of us forget that and jump in blaming divergence whereas it is our own fault..

see the chart

 

[Smart_trade]

After showing the divergence if the indicator goes into opposite zone....the divergence gets negated.

Divergence alone is not a trigger to take a trade....you need other conditions mentioned in the qualifier to merit an entry in the trade.

Smart_trade

 

[poortrader]

waiting for other confirmation

============
updated EOD picture

since the stoch stayed more than 5 bars at OS after crossing the hurdle (support break) it made the downside strong and eventually gave some good profits of 25 to 35 points

 

[balasoft80]

Hi ST,
Today i have gone for long above 5150 as it stayed more than 5 bars in OB zone and it hits SL. Was my entry wrong? Should i have come out as trade has not moved our favour for more than an hour? I think i am missing some obvervation here. How you would have handled this scenario? Please guide me.

Thank you so much for youe time

Thanks
Bala