How to trade with an oscillator

[Smart_trade]

Please advise how we trade this setup in the attachment.

The oscillator has remained in oversold region for more than 5 bars....so no buy signal...it will make a lower bottom,and stay in OS zone for less than 5 bars...and will give a positive divergence in the process....there we can buy with all the qualifiers mentioned in my post No 3 or 4 of this thread....

Best wishes,

Smart_trade

 

[Smart_trade]

Posting Nifty Futures 60 min chart of 4-9-2009....see the positive divergence the chart was showing....

Now posting same days chart in 5 min timeframe...the areas marked were showing that the market will explode on the upside....the NF gave 65-70 points move from this level....

Best wishes,

Smart_trade

 

[veekay304]

ST Sir,

Confused about the EXIT criteria.. Can you please advise me on this..?

thanks
VK

 

[Smart_trade]

ST Sir,

Confused about the EXIT criteria.. Can you please advise me on this..?

thanks
VK

VK,

It is best to trail the exit level to get full juice from the move.Suppose we are long, we will exit as under :

1) Let the oscillator go in overbought area.

2) Wait till oscillator from overbought area comes down to neutral area...but make sure that it stays in OB ares for less than 5 bars....

3) Wait for a downclose,ie the bar which closes below the earlier bar's close.

4) Sell when the downclose bar's low is broken .

Smart_trade

 

[SR_TA]

Posting Nifty Futures 60 min chart of 4-9-2009....see the positive divergence the chart was showing....

Now posting same days chart in 5 min timeframe...the areas marked were showing that the market will explode on the upside....the NF gave 65-70 points move from this level....

Best wishes,

Smart_trade

ST da..
May be I am missing something.. On 5 mins charts on 4th Sept, isn't there a negative divergence which would indicate the market is going to fall.. Price making higher high while Oscillator making lower than its earlier value..

 

[vishalalluri]

hi saint

todays nifty also shows stochastic above 80 for more tham 5 bars from 10 to 11 shud we see for some more time if nifty comes to the neutral zone and den again moves into the 80 levels

just a novice observation

helpoooooo

 

[vishalalluri]

oopps i waas watcing the slow stichastic lines but the FAST STOCHASTIC is nower related to what i posted in ma previouss post

sorry saint totslly confused

 

[veekay304]

VK,

It is best to trail the exit level to get full juice from the move.Suppose we are long, we will exit as under :

1) Let the oscillator go in overbought area.

2) Wait till oscillator from overbought area comes down to neutral area...but make sure that it stays in OB ares for less than 5 bars....

3) Wait for a downclose,ie the bar which closes below the earlier bar's close.

4) Sell when the downclose bar's low is broken .

Smart_trade

Thanks ST Sir,

I was doing this way only, but was not sure.. now happy.

I've noticed that the stock may return back to overbought, if it has not crossed the imaginary central line (50).

thanks again for this system which works very well in range bound market..

VK:clap::clapping:

 

[veekay304]

ST Sir,

One more doubt... Always wanted to ask..

Do we follow any rules on trailing stops... or is it personal convenience..??

Please advise..

VK

 

[Smart_trade]

ST da..
May be I am missing something.. On 5 mins charts on 4th Sept, isn't there a negative divergence which would indicate the market is going to fall.. Price making higher high while Oscillator making lower than its earlier value..

No...SR_TA, will post the chart with markings in the evening...the idications were other way round....they were bullish...

ST