How to trade with an oscillator

[Smart_trade]

Bala,

Nothing wrong in that entry if the prices were continuous. But we had a gap and after the gap market climbing to overbought zone and stays there for 5 bars. Look at the distance market has travelled. It always gets tired and many times the move gets exhausted there.

But after the entry at 11:15 the market made a new top but displayed a negative divergence.....also 5150-5170 is a very strong resistance band for many days. I will get out of long positions on this divergence and the fact that market was not making any serious progress in the upward direction.We had two divergences on the chart and in the afternoon the bulls gave up and the bears grabbed the control.

Smart_trade

 

[balasoft80]

Thank you so much

 

[allwin005]

Dear ST sir thanks for these great guidance. I have a small doubt can this method be applied to commodities and stocks (i saw the examples for nifty only) .

 

[CASPER]

.........................ST if you Find My Post Misleading Or Irrelevant Please Delete the Same ...,

Bala..,

Below are Just My Views ,

Few Comments I have mentioned on the Chart & the rest below...,

I generally trade based on 15 SMA the Blue line on the Chart and I use ADX to check for the strength of the trend. I am long if the Price is above 15 SMA and short if below ..., BUT i dont take trade ONLY based on that it goes along with ADX as explained below & Candle formations(Marubozu and Aggresive Pivot Candle in this Case).

For me Wider the Gap between the Price and SMA Stronger the Current Trend.

On the Chart in the DMI Indicator section ADX is the Blue line among them , the Green Line is +DI & Red is -DI..., I generally dont get into a trade IF the blue line is below BOTH +DI & -DI, Its an indication there is No strength in the Current Trend.

There are 4 signals which are Long,Short,Long and short on the ADX indicator (Red and Green Circle on DMI , 1st Signal at Gap Opening Circle NOT marked ...:annoyed:, But you Can see the Signal for Buy ).

- The 1st Obviously cannot be taken because its during the Gap Up ( Market Opening)

- The Second i dont enter because as explained in the Chart the Price is still within the rectangular Box.

- Third not taken because as mentioned in the chart "I" wait for a confirmation bar & Also as mentioned above i.e. ADX indication "I generally dont get into a trade IF the blue line is below BOTH +DI & -DI "

-Fourth I would enter for 2 reasons, I get a Confirmation bar and subsequently an aggressive Pivot.

Hope you find the above information Useful.

Any Healthy criticism from anyone reading this is definitely Welcome......

Any Suggestions from ST is definitely More than Welcome....................


Cheers,

 

[balasoft80]

Thanks much. Though i am not aware of ADX part, the explaination on the price action is good.

 

[rangarajan]

Casper,
Every Tested trading method is good as per individual choice provided it gives profit 80% of the time.
This thread is dedicated to Trading with Stochastic but with certain Qualifiers which r NOT complicated & Easy to understand for lay man like me.No rocket science needed.
By participation & sharing,we learn how to fine tune & reduce losses.
At least for me,STs method is Tension free(with pranams to his Guru) & 80% profit days since i started using it.
Now i would also keep yr views & knowledge is power.
Incidentally,2652 method by Dhiraj is also Tension free & consistent profit if one is not greedy.
Do contribute more for our benefit & the pleasure is ours.

 

[jake8900]

I am also very interested

 

[rangarajan]

Dear Smart,
I am posting 5min chart of onelife today.
Though there was a qualified short(11.45-12.0) & divergence,both were negated(giving negligible profit) .
Could u pl explain how u would have traded.

 

[DanPickUp]

Casper,
Every Tested trading method is good as per individual choice provided it gives profit 80% of the time.
This thread is dedicated to Trading with Stochastic but with certain Qualifiers which r NOT complicated & Easy to understand for lay man like me.No rocket science needed.
By participation & sharing,we learn how to fine tune & reduce losses.
At least for me,STs method is Tension free(with pranams to his Guru) & 80% profit days since i started using it.
Now i would also keep yr views & knowledge is power.
Incidentally,2652 method by Dhiraj is also Tension free & consistent profit if one is not greedy.
Do contribute more for our benefit & the pleasure is ours.

Hi

I can assure every body here, that I had some PM in the past with ST and told him, that I am afraid to trade with pure Stoch. I am used to trade only hedged positions as many of you know. Options and futures in one strategy.

In the last few weeks now, I also started to trade some times only naked futures in the mini S&P 500 ( One point is USD 12.50 ) and I have to say, it works. In a few hours 40 points with one position can be made ( No adds, as I am a risk averse trader )

To make any short time entry I used and added to other tools, what ST spoke about:

Three short time frames: 1minute, 3 minute and 5 minute.

Now I added to each time frame what I am interested in. ( Very individualized to each person )

On each time frame I use two indicators I feel very comfortable with and on the 5 minute time frame I use only Stoch and what I have read in this thread.

Stoch is a great help and used the way it is explained here in this thread in conjunction with other tools is a bang.

If it comes to very special levels in the market which are important for me, I also have a look at bid/ask ( DOM trader ) and if on the level I spot bid or ask tells to take the trade in conjunction with the Stoch, I take it.

Just to share some infos as I also learned some stuff here in this thread

Tc

DanPickUp

 

[Smart_trade]

Dear Smart,
I am posting 5min chart of onelife today.
Though there was a qualified short(11.45-12.0) & divergence,both were negated(giving negligible profit) .
Could u pl explain how u would have traded.

Rangarajan,

Post the chart please, let us see how it looks.......

If the scrip has recently taken a breakout after long sideways accumalation, then the signal to go short, though qualified, will give small downward move as the trend has changed to uptrend. Always see the oscillator signals also in the context of overall trend.....trend is the king in the market.

Smart_trade