How to trade with an oscillator

[Smart_trade]

But isn't Stoch's not in OS region now for almost 5 bars(there was a small up as well, but its gonna stay in OS region in all probabilities).

Negative Divergence + Stoch's in OS > 5 = ?

Mkt likely to take a small rally....pocket some profit...and leave the rest if the support is cracked....

ST

 

[achopraa]

Mkt likely to take a small rally....pocket some profit...and leave the rest if the support is cracked....

ST

So true...
What was the reason for rally?
Bounce back from Support?
Or since it remained in OS for long, it went up to dissipate some of the heat?

Also, what strategy should we keep during these rallies. AFAIK, we try to add up the SHORTS on highs. Is my assumption correct?

 

[Smart_trade]

So true...
What was the reason for rally?
Bounce back from Support?
Or since it remained in OS for long, it went up to dissipate some of the heat?

Also, what strategy should we keep during these rallies. AFAIK, we try to add up the SHORTS on highs. Is my assumption correct?

There is a reason why it took a rally.....it was showing on the chart....but it will require a long post so will post in the evening....

Yes after the rally we will look for going short again...but if the osc goes in OB zone before mkt turning down, then 5 bars effect gets negated....be careful...

See a thread on DeMark sequential and read TDST lines....that will tell you how to get these supports...and indication of a rally....

ST

 

[achopraa]

As per my chart Stoch stayed in OB region for 4 bars .....5th bar is 10:55 and it came out of OB zone....hope there is no data error....

There is a negative divergence in the tops you mentioned....one can go short here....stoploss 11:20 high

Smart_trade

So stop loss hit since the price breached high of 11:20 bar which was 4833.90.
Anyways, taking advantage of your replying in real time, I can see that the with the candle of 12:50, the Stochs came out of OB with <5 candles.
Now this candle closed at 4829 & made a low of 4823.35
The next candle of 12:55, breached the previous low but again ended up as a green candle.
So, is above the right signal for Short or do we look for 2 consecutive RED candles with the second one breaching the low of first one and also Stoch's not reaching the OS zone in the meantime.

Thanks in Advance.

 

[balasoft80]

Hi ST,
Could you please explain bit about below point?

but if the osc goes in OB zone before mkt turning down, then 5 bars effect gets negated....be careful...

Do you mean that if osc goes to OB and stays more than 5 bars, then we shouldn't short it?


because today I was shorted at 4823 and it came to 4798. But I didn't book the profit as the oscilator stayed more than 5 bars in OS region and kept SL in the previous pivot high at 4826. It hits the SL. Thank you so much

Thanks
Bala

 

[Suraj]

Hi Bala,
It would be nice if you could attach the chart and show your trade..

Hi ST,
Could you please explain bit about below point?


because today I was shorted at 4823 and it came to 4798. But I didn't book the profit as the oscilator stayed more than 5 bars in OS region and kept SL in the previous pivot high at 4826. It hits the SL. Thank you so much

Thanks
Bala

 

[rangarajan]

What an opportunity to short at 4860 P/H

 

[Smart_trade]

So stop loss hit since the price breached high of 11:20 bar which was 4833.90.
Anyways, taking advantage of your replying in real time, I can see that the with the candle of 12:50, the Stochs came out of OB with <5 candles.
Now this candle closed at 4829 & made a low of 4823.35
The next candle of 12:55, breached the previous low but again ended up as a green candle.
So, is above the right signal for Short or do we look for 2 consecutive RED candles with the second one breaching the low of first one and also Stoch's not reaching the OS zone in the meantime.

Thanks in Advance.

You are daytrading.....the market moved 30 points in our favour after we shorted ......in such case we MUST grab whatever profits we can...if not 20,15,10 even 5 points.......once the trade moves in profit, it should never hit your stoploss...your capital should be at risk only for first 10-15 min....this is the first principle of daytrading......never let the profitable trade result into a loss...

Smart_trade

 

[achopraa]

There is a reason why it took a rally.....it was showing on the chart....but it will require a long post so will post in the evening....

Yes after the rally we will look for going short again...but if the osc goes in OB zone before mkt turning down, then 5 bars effect gets negated....be careful...

See a thread on DeMark sequential and read TDST lines....that will tell you how to get these supports...and indication of a rally....

ST

Waiting for the Long Post

So stop loss hit since the price breached high of 11:20 bar which was 4833.90.
Anyways, taking advantage of your replying in real time, I can see that the with the candle of 12:50, the Stochs came out of OB with <5 candles.
Now this candle closed at 4829 & made a low of 4823.35
The next candle of 12:55, breached the previous low but again ended up as a green candle.
So, is above the right signal for Short or do we look for 2 consecutive RED candles with the second one breaching the low of first one and also Stoch's not reaching the OS zone in the meantime.

Thanks in Advance.

Actually I did covered my shorts when it came down 25 points (trailing Stop loss of 5 points helped).
How about the other scenario that I mentioned?

Many thanks for answering my query. This does makes some concept clearer.

I have read about divergences all through the thread but unable to digest HIgher Highs and Lower Lows.

If I am not wrong, during the above duration, the Price Made a Higher-High while in Stochs, it made a corresponding Low. This is negative divergence?

If the above is correct, please enlighten by mentioning 2 lines about how this would have been positive divergence?

Some more insights on Divergence please.
When do we join the peaks of prices and when do we join the Bottoms?

 

[adityasaraf007]

You are daytrading.....the market moved 30 points in our favour after we shorted ......in such case we MUST grab whatever profits we can...if not 20,15,10 even 5 points.......once the trade moves in profit, it should never hit your stoploss...your capital should be at risk only for first 10-15 min....this is the first principle of daytrading......never let the profitable trade result into a loss...

Smart_trade

ST Sir.... I have always had trouble with this quote..... When do you consider to move your Stops to Breakeven..... I mean suppose we are trading Nifty on 5min TF and it moves 15points (for example) in our favour.... Do you move the Stops to Breakeven......

Regards