TECHNICAL INDICATORS - SLOW STOCHS + RSI
Ok, so now you have your support & resistance levels, pivotal levels, etc... but still one may be hesitant to initiate a trade. Wish someone was there to TELL us when to go ahead and and enter long/short...
Well, I personally use two indicators RSI & SLOW STOCHS for my intraday trades...
I won't get into definitions & technical stuff of the above. To the point, how to use it...
RSI:
In your market-watch window, right-click on NIFTY FUT - 1M (ie the current series' nifty future), select "Intraday Chart"...
A tick-by-tick live intraday chart of NF will pop up in new window. There will be an option to change the timeframe (TF) of the chart... Select 1 minute. Also, change the chart type from line to candlestick (this change of type is not necessary)... So, instead of tick-by-tick chart, you'll have the 1 minute chart in front of you (of the current session)... Now, select Relative Stength Index (RSI) from "Indicators" menu and in the parameters pop-up window, select 14.
RSI gives the over-bought & over-sold status of nifty future in form of numbers...
at or below 30 level is supposed to be over-sold... an upmove is due
at or above 70 level is supposed to be over-bought.. a down move can be expected...
SLOW STOCHS:
i prefer slow stoch over 5 day charts parameter. there's this website which has the intraday chart of NIFTY SPOT + slow stoch + RSI...
http://niftyintraday.googlepages.com/nifty50
it updates itself automatically every minute.
It's the crossover of slow stochs at a partular level which indicates buy or sell...
crossover at or above 80 is signal for sell
crossover at or below 20 is signal for buy
One should start booking profit partly when it reaches or crosses 50..
Now, as in case of other indicators, there are some days when only one side of the signal has to be followed.
Like, in these bearish days, it's always better to short when RSI / Slow stoch gives the necessary signal... and to avoid the buy signals... ie SHORT ON RALLIES, INSTEAD OF BOTTOM FISHING....
read this for more info:
http://www.tradingacademy.com/lessons/lessons20080208.shtm
THESE INDICATORS WILL FAIL ON BIG TREND-REVERSAL DAYS... eg, they will indicate over-bought for more than 30 minutes, but still one may not find significant downmove. Such days happen once in a while, and market mood itself will indicate whether the main focus should be to buy on dips or sell on rallies....
(here's the recent 5 day chart of nifty spot + slow stoch attached)
one may paper-trade for some days, to confirm & build confidence.. REMEMBER, THESE INDICATORS ARE SECONDARY... MAIN FOCUS SHOULD BE ON THE INTRADAY NIFTY FUT CHART & YOUR LEVELS...
i would rate these indicators 90% on success ratio... but it's only with experience, one can use such indicators accurately...
slow stoch + RSI + RSR level of NIFTY FUT
- a lethal combination to enter a position...
http://www.traderji.com/attachments...406-nifty-futures-trading-intraday-stochs.png