How to trade with an oscillator

[Smart_trade]

ST,
When stoploss triggers, can we reverse our position, plz explain
http://imgur.com/4g0Xa

This is not a Stop And Reverse ( SAR ) method...when stoploss gets hit, we liquidate our position and wait for the signal in opposite direction.

Buy signal comes when the oscillator comes out of 20 or OS zone ,satisfies all critaria. Oscillator staying for more than 5 bars in OB area shows that market is strong and likely to go up further...but if you buy there, be very nimble to get out on signs of trouble and not wait for your stops to be hit. Our stops should be hit rarely...we should in most cases get out of the position much earlier based on market action. At market top today, oscillator had gone in OB zone after giving negative divergence giving enough hints to get out from long position near the top .No reason for stoploss to get triggered.

Smart_trade

 

[murthyavr]

At market top today, oscillator had gone in OB zone after giving negative divergence giving enough hints to get out from long position near the top .
Smart_trade

ST:

When the oscillator is in OB or OS zone, can we take the divergences into consideration? Can we act upon them?

Thanks..

 

[ushasunil]

This is not a Stop And Reverse ( SAR ) method...when stoploss gets hit, we liquidate our position and wait for the signal in opposite direction.

Buy signal comes when the oscillator comes out of 20 or OS zone ,satisfies all critaria. Oscillator staying for more than 5 bars in OB area shows that market is strong and likely to go up further...but if you buy there, be very nimble to get out on signs of trouble and not wait for your stops to be hit. Our stops should be hit rarely...we should in most cases get out of the position much earlier based on market action. At market top today, oscillator had gone in OB zone after giving negative divergence giving enough hints to get out from long position near the top .No reason for stoploss to get triggered.

Smart_trade

A real smart trader indeed..:thumb:

 

[Smart_trade]

ST:

When the oscillator is in OB or OS zone, can we take the divergences into consideration? Can we act upon them?

Thanks..

Yes...we use it to book profits because after 2 or max 3 divergences, the market is likely to exhaust its energy and turn down.

Today when market stayed on OB zone for 5 bars....the oscillator went upto 90-93 level...and of subsequent 2 higher tops, it just managed to barely touch 80-82 levels indicating reversal is likely. Between the tops if the oscillator has dipped into the neutral zone and climbed back again, we can consider the divergence.

Smart_trade

 

[murthyavr]

Thanks, ST.

This particular feature did not figure in any of the previous posts, to the best of my knowledge, and it's a very valuable one!

Reading your above reply together with a reply to some other member's post - now I assume that a single divergence can not be taken as a cue, as the market might be having lot of steam still left. We have to look for at least two or three divergences, to get a hint of change in the direction of price movement.

Hope my understanding is in order.

 

[anilnegi]

can any body provided me thread by saint- 5 minute breakout intraday strategy, thanks in advance

 

[Smart_trade]

Thanks, ST.

This particular feature did not figure in any of the previous posts, to the best of my knowledge, and it's a very valuable one!

Reading your above reply together with a reply to some other member's post - now I assume that a single divergence can not be taken as a cue, as the market might be having lot of steam still left. We have to look for at least two or three divergences, to get a hint of change in the direction of price movement.

Hope my understanding is in order.

In normal situation even 1 divergence is sufficient to dissipate the energy and reverse the trend...but as we has excessive OB condition by the oscillator being in OB zone for more than 5 bars, we require 2-3 negative divergences.....in such cases one negative divergence is generally not sufficient.

Smart_trade

 

[krish4166]

ST,

 

[VJAY]

Dear Krish,
Why not you gone long above 1.00 PM bar high? ...there is clearly 5 bars above OB zone..
That bearsih bar is 6th bar...so there is an opportunity...I also entered long there...not with this method...another method

 

[krish4166]

Vijay,
If it is different method the entry is early.