Quote from jficquette:
They only work on swings when the market is not trending hard. Take only sto trades where it has done a full cycle. I.E. if you are buying oversold make sure the last trade was selling overbought and the sto was overbought. This indicates a meandering market.
If you are buying oversold but on the last swing the sto never got overbought then it is generally a continutation.
Best way to use to Sto's in trending markets supported by news is to use them to get in with the trend on a pullback. So if market is up big let the sto get over sold and then use a trendline to get back in with the market.
John
Quote from feb2865:
Good point John
I notice that the best signals I got were after 10:00 AM news I waited for the dust to settle and take the other side.
I pull the charts only to see market opening time frame from 9:30 to 4:16 As you mentioned about cycles, will be advisable to see what the price has been doing pre-market to be aware of those cycles?
Quote from feb2865:
Good point John
I notice that the best signals I got were after 10:00 AM news I waited for the dust to settle and take the other side.
I pull the charts only to see market opening time frame from 9:30 to 4:16 As you mentioned about cycles, will be advisable to see what the price has been doing pre-market to be aware of those cycles?
Quote from cvds16:
it's still not too clear to me where you get out (target/stop). Could you post a chart, like they say: a picture tells a thousand words.
Quote from luxor:
I've tried plain stochastics with little success. I've found StochRSI to work much better, especially in the morning when the trends are clean.
Does anybody use StockRSI? The only thing I wish I had was another good indicator I can compare it against to tell me if a stock is going to remain overbot/oversold.
lux
Quote from alex.samant:
The only 2 problems with stochastics (and those made me replace it with a MACDHistogram as an oscillator) are:
1) It's subjective in what concerns the time window, as it measures the close vs the range of that time window, and with all the smoothing applied to it, it still issues false signals, and when price action is choppy, you are in for a rough ride.
You would even have the surprise of getting different signals using two consecutive time-windows, say a 9 and a 10 or 11.
2)It is normalized and does not have a clear quantitative measure of momentum therefore making the rules of buying when it is oversold and selling when it is overbought useless and most of the time, even combined with a higher timeframe notion of trend it will have you selling into a new uptrend and buying into a new downtrend.
Plus, it's too sensitive and it is measured using the closes. When you use it intraday, what difference does the close on a 10 minute bar make?
Therefore, as an oscillator i would recommend using a MACD Histogram calculated using the H+L+C/3 formula instead of the Close price and considering the following rules:
When MACD Histogram is above 0 it's overbought and when it's below 0 it's oversold. NOTE: This can ONLY be used considering a higher timeframe trend.
Quote from cvds16:
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