How to trade with an oscillator

[krish4166]

ST,
Plz give ur comments on today,s trade for NF on 5min TF, as I really missed the trade.
stchts has stayed above 80 nearly 14 bars.

 

[Smart_trade]

ST,
Plz give ur comments on today,s trade for NF on 5min TF, as I really missed the trade.
stchts has stayed above 80 nearly 14 bars.

Todays upmove gave 2-3 chances for long trade entry based on pivots, oscillator divergence, oscillator staying in OB zone for more than 5 bars etc...

The short term trend changed from down to up above 5449-50 and NF gave over 55 points...

Should not miss such trades...

Smart_trade

 

[krish4166]

ST,
Plz show me on chart.

 

[krish4166]

murthyavr,

Points 1 and 2 are correct.

When oscillator stays in overbought region for 5 bars or more, it is called excessive overbought phase and it needs time to dissipate the energy.So when after 5 bars, it comes out of the OB zone, it is not a low risk sell entry, the market may make another 2-3 bars is correction and make a new high and we try to buy this correction instead of selling.

But when market stays in overbought region for very long time say for 8-9 bars or more, the buying force fizzles out...hence it is not a good idea to buy after 8-9 bars as market cannot continue its upward march indefinately.

After say 5 bars in the OB region market comes out of it, we consider it as a correction only if it does not go into oversold region.Because if our assumption is that market is excessively bullish, it should make a shallow 2-3 bars correction and go to the new top. Instead if it takes a very deep correction and goes into an opposite oversold zone, then the bullish assumption gets nullified.

I have tried to give the thought behind all the actions ...hope it helps in understanding the OB/OS phenomenon correctly.

Smart_trade

ST,
Was there any buy signals on 5min NF as per qualifiers and also as you have mentiond if stchs stays for 8_9 bar in OB/OS, the buying or sell force it fizzles out. Today stochsts 5 min TF has stayed in OB continuoursly for 14 bars how do you take trade in this situation.

 

[Smart_trade]

ST,
Was there any buy signals on 5min NF as per qualifiers and also as you have mentiond if stchs stays for 8_9 bar in OB/OS, the buying or sell force it fizzles out. Today stochsts 5 min TF has stayed in OB continuoursly for 14 bars how do you take trade in this situation.

You could buy immediately on 5 th bar once it completes and Osc still in OB zone...and ride the move for 8/9/ or 14 bars .....This is a high risk entry though...but trade with small stops....

There was no entry on Oscillator qualifiers but we had divergence and the pivot high on 5 min is taken out after this divergence so use that to go long.

One should use any technique to his advantage and not get bogged down by rules....you will very rarely find ideal entry conditions in real time trading...also use some other method as a supporting tool to this method

ST

 

[murthyavr]

ST:

Somewhere in this thread you have referred to StreetSmart's hook method. I have gone through the pages of that book, but it was not very illustrative.

Can you please elaborate on this method - as regards identification/entry/exit of a proper hook?

Thanks..

 

[Smart_trade]

ST:

Somewhere in this thread you have referred to StreetSmart's hook method. I have gone through the pages of that book, but it was not very illustrative.

Can you please elaborate on this method - as regards identification/entry/exit of a proper hook?

Thanks..

Sure , it is a method called " Anti" in that book...will write a few lines with a chart....give me 1-2 days time...

ST

 

[balasoft80]

Hi ST,
Thank you so much for your wonderful thread. I have a small clarification here. If stochastic stays more than 8 or more bars means, we shouldn't go for the long? I am not much clear on this point.

Could you please elaborate bit if your time permits?

Thanks
Bala

 

[krish4166]

ST,
Today I saw in one of your post in realtime dicussion :
Shorted Nifty fut below 9:55 low.....

Smart_trade
As you have kept your name smarttrade, really you are smartrader.
for my understading I did not get any sell signal.
Plz explain on what signal u recommended to sell below 9.55 bar.

 

[Smart_trade]

ST,
Today I saw in one of your post in realtime dicussion :
Shorted Nifty fut below 9:55 low.....

Smart_trade
As you have kept your name smarttrade, really you are smartrader.
for my understading I did not get any sell signal.
Plz explain on what signal u recommended to sell below 9.55 bar.

Apart from Stochastics I follow different methods/parameters mainly pure price action...failures of breakouts/breakdowns is something I am always on look out to encash on the positions of traders who are trapped in the direction of breakouts. These are some of the best trades giving great Reward:Risk ratio

My ID is Smart_trade which means that I want my trades to be smart....but it does not imply that I am a smart trader.....the reality is quite the opposite....

Smart_trade