Stochastics and MACD Histogram for daytrading?

[pstallone]

Quote from deaddog:

Indicators are a reflection of what price has done.

Know how the indicator works then watch the price.
What does the price have to do before the MACD or Stochastics cross?
If you have to use indicators you might as well be a step ahead of them.

I watch for the price to be trending in the direction, I want it to?

The crossover comes to late, I do wait for the MACD lines to be well below the 0% line, at at least beginning to draw closer.

Als the Stochastics, has to be below, the 20% line.

How is daytrding done without charts? I note posters, claim charts are worthless.

The problem is all the whipsaws!

 

[ziradee]

Stochastics and MACD are lagging indicators. They should never be used for entry, only as confirmation while in a trade imo.

 

[pstallone]

Quote from ziradee:

Stochastics and MACD are lagging indicators. They should never be used for entry, only as confirmation while in a trade imo.

What can I use to establish entry points, taking all the above posts into consideration?

I am looking to daytrade only.

 

[ziradee]

What Instruments do you trade?

 

[pstallone]

Quote from ziradee:

What Instruments do you trade?

Stocks only, go long and short intraday. Rarely hold positions overnite.

No futures options etc.

 

[Spydertrader]

Quote from pstallone:

What can I use to establish entry points?

Price and Volume.

- Spydertrader

 

[NoDoji]

Quote from pstallone:

What can I use to establish entry points, taking all the above posts into consideration?

I am looking to daytrade only.

Buy dips on an uptrend (bouncing along the 20-period MA), short rallies on a downtrend (hitting its head against the 20-period MA); use stochastics to guide your timing on the entries. If picking a top or bottom, set a tight stop.

 

[pstallone]

Quote from NoDoji:

Buy dips on an uptrend (bouncing along the 20-period MA), short rallies on a downtrend (hitting its head against the 20-period MA); use stochastics to guide your timing on the entries. If picking a top or bottom, set a tight stop.

Thats pretty much, my strategy, although I have been getting whipsawed around a bit.

I have seen to many trend reversals lately.

 

[Unhommefou]

Quote from pstallone:

Stocks only, go long and short intraday. Rarely hold positions overnite.

No futures options etc.

I know that you are an equity trader and all, but since your are learning to daytrade, I recommend that you do the following:

Go to FXCM.com, Oanda.com, or CMSForex.com and sign up for a demo account.

Since Forex is a 24/6 market, you can practice your trading strategy when you get home from work, or whatever is most convenient for ya.

After you get a feel for how your trading strategy works in the Forex market, I then recommend that you BACKTEST your daytrading strategy.

I take that back -- you should backtest your strategy first, just to see if it has an edge AT ALL, then move on to the Forex demo platforms so you practice your strategy.

Then once you are ready to trade for real, paper trade your strategy on whatever stock of choice you have (I recommend SPY, DBA, QQQQ, USO but I am just an ETF n00b) for a month or two.

Once you done that, then everything begins to make sense.

100% full disclosure: I "daytrade" the Forex market (between 6pm-10pm EST) and Swing trade ETFs due to still (luckily) having a job. You can take what I say with a pinch of salt if you'd like...

 

[Baudot]

You've received some good advice. Donna said it quite well.

I'm a fan of stochastics but I'm also looking at ADX as well. The ADX means little to me and I generally look for a +DMI and -DMI to go in the desired direction.

Read up on them.

My trades are usually measured in days generally from 4 to 10 days unless I have a strong overriding fundamental bias that is confirmed on the chart.

Don't fade the market or a sector unless you have a good reason.

Generally speaking, I look to understand two things:
1 - Price action of a stock (Charting)
2 - Some fundamental aspect of a market or sector that would establish a strong liklihood that my trades will be fine.

You use stops! Great!!!

I find a few good trades easily make up for a few bad ones as long as I dump them fairly quickly.

Take your profits.

As to fading the opening and closing... well... I don't see much in it for me. In my view there is no fundamental edge there and only charting.

To me, that is operating on 1 cylinder. The same can be said for the guy who only looks at fundamentals.

I'm still working on learning some ecnonomic theory to broaden my view. In the end though... I will invest in an instrument using a chart to pick entry and/or exit unless a strong fundamental bias says otherwise.

My very best advice though is to never ride an investment down in hopes of a higher ride up. Sell your losses ***early*** and move on!!!!!

That's just my view, if anyone disagrees then so be it.

Eric