How to trade with an oscillator

[Smart_trade]

Posting 10 min Nifty Futures chart....

Note how the stochastics indicator was staying over 80 area yesterday and today for much more than 5 bars...indicating markets will go much higher ,this was a very strong buy in every dip yesterday and today...and NF eventually blasted ....it pays to listen to what mkt is telling us...

Best Wishes,

Smart_trade

 

[Aqua9]

Posting 10 min Nifty Futures chart....

Note how the stochastics indicator was staying over 80 area yesterday and today for much more than 5 bars...indicating markets will go much higher ,this was a very strong buy in every dip yesterday and today...and NF eventually blasted ....it pays to listen to what mkt is telling us...

Best Wishes,

Smart_trade

Dear ST,

Certainly based on the stochastic being in overbought region had bought call at 2:45 and sold at 3:30 today and made profits, but today at 11:30 and 12 as 30 min stoch was above to divert down and even 5 min was same did lose out some on shorting (bit of bad luck)

As most of them are stating these upmoves are due short covering would you still feel that upmove is strong as the stoch is in overbought for 4-5 strong candles ???

cheers
Aqua.

 

[humble]

Posting 10 min Nifty Futures chart....

Note how the stochastics indicator was staying over 80 area yesterday and today for much more than 5 bars...indicating markets will go much higher ,this was a very strong buy in every dip yesterday and today...and NF eventually blasted ....it pays to listen to what mkt is telling us...

Best Wishes,

Smart_trade

Another gem, I am going to remember this forever - what i have learnt today reading this post.

I used to always listen people suggesting buying on dips, never understood how to enter. What an example :clapping::clapping:

Regards,
-Sri

 

[dpsdhr]

Posting 10 min Nifty Futures chart....

Note how the stochastics indicator was staying over 80 area yesterday and today for much more than 5 bars...indicating markets will go much higher ,this was a very strong buy in every dip yesterday and today...and NF eventually blasted ....it pays to listen to what mkt is telling us...

Best Wishes,

Smart_trade

sir ji ... but why do u say market would go more up .... if u see in weekly charts of nifty its an down trend .....

 

[Smart_trade]

Dear ST,

Certainly based on the stochastic being in overbought region had bought call at 2:45 and sold at 3:30 today and made profits, but today at 11:30 and 12 as 30 min stoch was above to divert down and even 5 min was same did lose out some on shorting (bit of bad luck)

As most of them are stating these upmoves are due short covering would you still feel that upmove is strong as the stoch is in overbought for 4-5 strong candles ???

cheers
Aqua.

Hi Aqua,

We as traders donot have to think whether the market is going up on short covering or any other reason....our job is to read the market correctly,position ourself to take full advantage of the move and take our profits when mkt tells us that the move is about to end or ended.....reasoning part we leave to the analysts.....

Conventional way of selling once the oscillator moves in OB area is incorrect....if the oscillator stays in OB area for extended period of time (more than 5 bars)...it actually is a strong buy signal .If we observe the qualifiers I have mentioned (These are developed by Thomas DeMark...so the credit goes to him...I am only applying these to our markets) then we would have avoided sell entry in yesterday's gallopping markets.....

As the indicator suggests,I feel that the market has more steam left and will go still higher .......

Best Wishes,

Smart_trade

 

[Smart_trade]

sir ji ... but why do u say market would go more up .... if u see in weekly charts of nifty its an down trend .....

Sirji,markets have already come up 300 nifty points from its recent low.....I am not predicting how high they will go....but the indicators were confirming on 14th and 15th that the market will go up strongly....and we took advantage of this upmove.....

Best Wishes,

Smart_trade

 

[Saint]

Ah,missed this gem of a thread......great going,ST.

Saint

 

[Smart_trade]

Ah,missed this gem of a thread......great going,ST.

Saint

Welcome to the thread Saint,....so happy to have you on this thread....

Regards,

ST

 

[Smart_trade]

Posting a chart of 30 min Nifty Futures for last 3 days of market action....

Note that market remained in overbought region for 14 bars on 15 th indicating bullish pressure is excessive and it needs to decipate but in the meanwhile market will continue its upward march.....this background view helped us to buy all dips on 17th....and even on 17th,market remained in OB region for 8 bars....still indicating strong northwards movement...and market kept its word by going higher.

Best Wishes,

Smart_trade

EDIT : On 17th in the chart please read Overbought in place of "oversold" mentioned on the chart

 

[ag_fx]

Thanks ST Sir...for yet another gem of a post...
I had a few doubts a day ago and was thinking of posting them here...It would be great if you can answer them :

1) I guess the Settings used here for Stoch is 8,3,4 (Pride's). So, in case we change the parameters, the reaction of Stoch would change.But, would it still be worth considering a 5-bar set up? Or is it that these settings have some backtested credibility? Whats your view/observation on the same?

2) With different TFs, the reaction of Stochs will also be different. Like the other day you posted a 10 min chart and today a 30 min chart....5 bars of 30 min means 15 bars of 10 min and so on.....Thus, we will get a OB/OS in 5 min first,followed by 10 min,30 min,60 min & daily....
Any views on TFA? Like Saint Sir do for his flow methods?

These are just my queries....Dont know how relevant they are..

Happy Trading