How to trade with an oscillator

[VaibhavPRO]

Vaibhav,

It is as under :

Stoch D

Period..... 8

% K average... 3

% D average ...4

Smart_trade

Thanx a lot..Thought so but Got confused by default values in trade tiger..

 

[munde_77]

Vaibhav,

It is as under :

Stoch D

Period..... 8

% K average... 3

% D average ...4

Smart_trade

St da, could you please explain the particular reason for using this 8,3,4 other than default oscillators.

 

[Smart_trade]

St da, could you please explain the particular reason for using this 8,3,4 other than default oscillators.

Munde,

There is no hard and fast rule about which parameters to use....Amibroker standard parameters are 15.3.3 which I find a bit slow. Few are using 5,5,5 also...it is best to experiment various parameters with the counter and the timeframe you trade and get the best fit .

Smart_trade

 

[gsam]

This being an old chart, I am unable to see whether the market reamained in OB region for over 5 bars....

The oscillator qualifiers say that if it is staying in OB region for more than 5 bars then selling is not recommended. But the experience has indicated that many times the upmove accelerates so we buy with close stoploss as the market can take a deep correction before resuming its uptrend. Also if market stays for 8-10 bars or more in OB zone, many times it exhausts itself and buying into extended upmove should be avoided in such cases...

Smart_trade

ST Thank you!!! Getting a response from you has made my day :clap:. Thank you so very much for sharing this wonderful info by starting this thread.

 

[timepass]

Today the stochastics were in oversold region for more than 5 bars, and then zoomed up and stayed in the overbought region for more than 5 bars (till closing). Comments please.

PS : How many intraday chartists ended up with a headache today? ELHS, bollingerworm or whatever..

 

[Smart_trade]

Today the stochastics were in oversold region for more than 5 bars, and then zoomed up and stayed in the overbought region for more than 5 bars (till closing). Comments please.

PS : How many intraday chartists ended up with a headache today? ELHS, bollingerworm or whatever..

Such things do happen in the market. From your chart I observe that in OS zone market stayed for 6-7 bars and the down move got exhausted and the market turned up. The market is now in OB zone for more than 5 bars and the upmove still continues.

Market is a dynamic entity and sudden shift in supply/demand dynamics can cause the market to reverse after staying in OB/OS zone for more than 5 bars. Thus any technique needs to be traded jointly with 1-2 other tools and not as stand alone technique.

Kindly refer to my post few posts back where I have said that if the market stays in OB/OS zone for extended period of 9-10 bars and above...the move gets exhausted and the market is prone to reversal.

Smart_trade

 

[krish4166]

ST,
Stcts settings shud b used only for 5min or even for 30 min TF ?
If It could be used for 30 min, as of 12th and 13th how would u hv traded, pls explin.

 

[Smart_trade]

All it means is that sab fail ho sakta hai.

Its all probability bhai. After move happens analysts justify.

Mahen

Yes ,there is no technique which is does not fail. Traders don't have the luxury of analysing the market after the move so we have to see the probability and take a trade while the move is unfolding and keep our stops. And if something works 60-65 % time and fails 35-40 % times we still can make good profits in trading.

We have to always think that the trade which we are taking can fail...and be ready with our action if it fails.....if it works,great we are happy to add one more winning trade

Smart_trade

 

[krish4166]

ST
On hourly 23rd 12p.m. to yesterday 10 a.m stcs was on oversold and below 20 ie nearly 6 bars and now stcs on hourly came out of oversold and again given a sell signal and any buy signal given on 5 min with more 5 or 6bars in OB zone should be treated as buy signal ? plese explain

 

[Smart_trade]

ST
On hourly 23rd 12p.m. to yesterday 10 a.m stcs was on oversold and below 20 ie nearly 6 bars and now stcs on hourly came out of oversold and again given a sell signal and any buy signal given on 5 min with more 5 or 6bars in OB zone should be treated as buy signal ? plese explain

If you are talking about Nifty Fut.....the market has come out of OS zone and still not gone to OB zone yet on my chart...so a buy signal on 5 min timeframe can be taken...but I dont see 5 min osc in OB zone yet.....

Will answer the questions at the end of the day as I an trading intraday.....

Smart_trade