How to trade with an oscillator

[rangarajan]

Why did you sell at 4828 ? Here you are trading like a scalper and expecting to hold till you get larger profits....both conflicting things....there has to be some reason for taking profits...such as Oscillator in extreme zone, End of the Move bar, previous supports/resistances,or a short term pivot low cracked....etc

In 5 min there is no pivot low cracked after your entry...market not giving any threat to your position....

Is there any way to reduce this early profit booking?.......ask yourself why am I taking profits....curb the urge to take small profits...but that does not mean that end up holding the trade for too long and convert profits into loss....

Smart_trade

What is "End of move bar " pl

 

[rangarajan]

I have invariably observed that whenever there is big difference bet ATP & Closing price,be it NF or Stocks,Short or Long,you could see that market touches this figure either next day or in couple of days.

 

[timepass]

I have invariably observed that whenever there is big difference bet ATP & Closing price,be it NF or Stocks,Short or Long,you could see that market touches this figure either next day or in couple of days.

Market touches which price ?? The ATP ?? hmm..

 

[avad]

todays trade---

http://imageshack.us/photo/my-images/192/avad2thtrade.png/

bought at 4,815 and got out at 4,828 but the order got executed at 4,827.After that time went in seeing demos from internet people.

A little off topic but which internet do you guys use. I prefered wireless internet of Tata indicom for last3-4 months but the bill which i got this month was outrageous so used to trade for 10 -12 days from my phone using charts of yahoofinance.

today got a free demo of wired internet of 'pacenet' and 'Tikona' . Actually wanted bsnl but we dont use landline.So my options are just the above two, Has anyone used them?

Thanks.

 

[praveeniitkgp2]

Hi ST

very much thanks for your beautifully explained thread...it helps new trader like me..
anyway lets talk about today's trade( although its news(GDP) day )..today i was short initially and osc also stayed 5 bar in OS and GDP data came out I still bearish( I coudnt able to change my mind although charts says that market in bullish mode) did u long after 11 am if yes then when did you in long trade after 11 am......also how will you explain todays reversal after 2 PM in terms of osc....I did able to short on 4829 after pivot break.....and when is best time we should book profit in last one hours........
also if you can post todays chart of your trade then it will be nice also..


thanks again for your guidance

 

[prst]

todays trade---

http://imageshack.us/photo/my-images/192/avad2thtrade.png/

bought at 4,815 and got out at 4,828 but the order got executed at 4,827.After that time went in seeing demos from internet people.

A little off topic but which internet do you guys use. I prefered wireless internet of Tata indicom for last3-4 months but the bill which i got this month was outrageous so used to trade for 10 -12 days from my phone using charts of yahoofinance.

today got a free demo of wired internet of 'pacenet' and 'Tikona' . Actually wanted bsnl but we dont use landline.So my options are just the above two, Has anyone used them?

Thanks.

if ur a regular trader, better go for wireless internet connection.
u cant depend on the electricity .

 

[rangarajan]

Another interpretation from Net

"George Lane identified another form of divergence to predict bottoms or tops. A BULL SET-UP is basically the inverse of a bullish divergence. The underlying security forms a lower high, but the Stochastic Oscillator forms a higher high. Even though the stock could not exceed its prior high, the higher high in the Stochastic Oscillator shows strengthening upside momentum. The next decline is then expected to result in a tradable bottom. Remember that this is a set-up, not a signal. The set-up foreshadows a tradable low in the near future.

A bear set-up occurs when the security forms a higher low, but the Stochastic Oscillator forms a lower low. Even though the stock held above its prior low, the lower low in the Stochastic Oscillator shows increasing downside momentum. The next advance is expected to result in an important peak."

I think what the author means is that Negative/Positive Divergence could be used both ways if traded properly. ie Negative-initial short & get prepared for Long.

I once again thank Smart for educating on this wonderful Oscillator in the Right prospective,in simple language.

 

[rangarajan]

Posting ICICI cash chart today.%K was >80 for 5bars bet 13.1-13.35 & was a buy on dips.But never went >790.3 to make New High.
Pl discuss what was missed in the trade.

 

[timepass]

Posting ICICI cash chart today.%K was >80 for 5bars bet 13.1-13.35 & was a buy on dips.But never went >790.3 to make New High.
Pl discuss what was missed in the trade.

On the dip, the stochs went into OS zone (below 20) and hence the effects of the earlier bullish signal were cancelled.

 

[Smart_trade]

Posting ICICI cash chart today.%K was >80 for 5bars bet 13.1-13.35 & was a buy on dips.But never went >790.3 to make New High.
Pl discuss what was missed in the trade.

Rangarajan,

You are missing the following :

1) The area you marked is a second time the oscillator went into OB region and stayed for 5 bars. First time it went before that was at 12:25 bar and stayed there for 7-8 bars, then came to neutral area and again went to OB zone and stayed for 5 bars....if you had bought anywhere in the first zone, you would have made money....but also appreciate that market cannot remain in OB zone indefinately.......after 2 or 3 zones and staying in OB it gets tired out.....

2) Buying in the dips means buying once the fall is over, which is confirmed by taking out a bar's high or a pivot high......none of the two happened...and the market went into OS area nullyfying the effect of excessive OB area.

3) See the earlier chart examples carefully....whenever the market goes in OB area and stays there for > 5 bars, you will get a shallow pullback to sideways movement if the market has to go to a new high and not a deep fall like we had today in ICICI......the fall was so deep that the oscillator went into OS zone......this case is NOT a right case for buy the dips....

Trading is an art. It is never an exact science....we have some templates to guide us in our journey but we should not stretch it too much......

Smart_trade