Trading Strategies Using Technical Analysis
- Thread starter SwingKing
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Dual Time Frame Momentum Strategy
Dual Time Frame Momentum Strategy
Tools – Candlestick/Bar Chart, Stochastic (8,3,3) Daily and Stochastic (8,3,3) Weekly
Trade Setup – This setup was made popular by Robert Miner. The basis of this setup is to use momentum of 2 time frames to get into trades. Though Robert Miner also showed how to use E-wave and fibonacci with this setup, we will essentially stick only with the basic dual direction momentum setup.
Trading the Setup - Switch to the daily chart mode to use this setup. Below the main price window, you must have Stochastic (8,3,3) daily time frame and Stochastic (8,3,3) weekly time frame. It is absolutely essential to have both the stochastic windows (one for daily time frame and other for weekly time frame) on the same time. We enter the trade when the Weekly stochastic has crossed over in the oversold range (usually should have crossed around the 20-30 range) and is pointing up. We then pay attention to the daily stochastic and then buy when the daily stochastic crosses on the same mentioned range. When the daily crossover happens, the weekly stochastic should not be in the overbought range. Best signals in this setup occur when both the weekly stochastic and daily stochastic cross together. One such example, in the case of DLF has been explained below.
Target - Continue to hold the stock till the daily stochastic indicator does not signal a typical sell signal (that is, bearish crossover).
Stoploss - Stop loss in this strategy is fairly simple. Either this strategy works or it fails. Thus whenever the signal comes, do not take loss of more than 3% on the trade or keep stop loss of previous swing low. This strategy has a success rate of about 60%.
Note - This is not an investment strategy. Hence, do not continue holding the stock. This is pure momentum play. Buy it and exit once you get good gains and when the sell signal emerges. For better understanding I have cherry picked this example. Like all the strategies, even this is fallible.
Time Frames - You have to pick out proper pairs to execute this strategy. Here I have used Daily - Weekly pairs as I don't believe too much in shorter time frame trades. You can experiment by using 30 Min - 5 Hour pair or 5 Min - 30 Min pair. But bear in mind that there will be a lot many false signals as you continue to shorten the time frame.
Dual Time Frame Momentum Strategy
Tools – Candlestick/Bar Chart, Stochastic (8,3,3) Daily and Stochastic (8,3,3) Weekly
Trade Setup – This setup was made popular by Robert Miner. The basis of this setup is to use momentum of 2 time frames to get into trades. Though Robert Miner also showed how to use E-wave and fibonacci with this setup, we will essentially stick only with the basic dual direction momentum setup.
Trading the Setup - Switch to the daily chart mode to use this setup. Below the main price window, you must have Stochastic (8,3,3) daily time frame and Stochastic (8,3,3) weekly time frame. It is absolutely essential to have both the stochastic windows (one for daily time frame and other for weekly time frame) on the same time. We enter the trade when the Weekly stochastic has crossed over in the oversold range (usually should have crossed around the 20-30 range) and is pointing up. We then pay attention to the daily stochastic and then buy when the daily stochastic crosses on the same mentioned range. When the daily crossover happens, the weekly stochastic should not be in the overbought range. Best signals in this setup occur when both the weekly stochastic and daily stochastic cross together. One such example, in the case of DLF has been explained below.
Target - Continue to hold the stock till the daily stochastic indicator does not signal a typical sell signal (that is, bearish crossover).
Stoploss - Stop loss in this strategy is fairly simple. Either this strategy works or it fails. Thus whenever the signal comes, do not take loss of more than 3% on the trade or keep stop loss of previous swing low. This strategy has a success rate of about 60%.
Note - This is not an investment strategy. Hence, do not continue holding the stock. This is pure momentum play. Buy it and exit once you get good gains and when the sell signal emerges. For better understanding I have cherry picked this example. Like all the strategies, even this is fallible.
Time Frames - You have to pick out proper pairs to execute this strategy. Here I have used Daily - Weekly pairs as I don't believe too much in shorter time frame trades. You can experiment by using 30 Min - 5 Hour pair or 5 Min - 30 Min pair. But bear in mind that there will be a lot many false signals as you continue to shorten the time frame.
TimeFrameSet(inWeekly);
Plot(StochK(8,3),"Stochastic %K(8,3) Weekly ",colorRed,styleLine);
Plot(StochD(8,3,3),"Stochastic %D(8,3,3) Weekly",colorBlue,styleLine);
TimeFrameRestore();
Store this code in a separate AFL file and save it as stochastic weekly in indicator folder ... then simply add this indicator as well as the normal indicator ... here u go both daily n weekly stochastic at the same time ...
Plot(StochK(8,3),"Stochastic %K(8,3) Weekly ",colorRed,styleLine);
Plot(StochD(8,3,3),"Stochastic %D(8,3,3) Weekly",colorBlue,styleLine);
TimeFrameRestore();
Store this code in a separate AFL file and save it as stochastic weekly in indicator folder ... then simply add this indicator as well as the normal indicator ... here u go both daily n weekly stochastic at the same time ...
Re: Dual Time Frame Momentum Strategy
the main point in this setups is that when bvoth daily and weekly stochastic hook out of the oversold zone...above 20 at the same time...only then we should enter the trade
?????????
Dual Time Frame Momentum Strategy
Tools Candlestick/Bar Chart, Stochastic (8,3,3) Daily and Stochastic (8,3,3) Weekly
Trade Setup This setup was made popular by Robert Miner. The basis of this setup is to use momentum of 2 time frames to get into trades. Though Robert Miner also showed how to use E-wave and fibonacci with this setup, we will essentially stick only with the basic dual direction momentum setup.
Trading the Setup - Switch to the daily chart mode to use this setup. Below the main price window, you must have Stochastic (8,3,3) daily time frame and Stochastic (8,3,3) weekly time frame. It is absolutely essential to have both the stochastic windows (one for daily time frame and other for weekly time frame) on the same time. We enter the trade when the Weekly stochastic has crossed over in the oversold range (usually should have crossed around the 20-30 range) and is pointing up. We then pay attention to the daily stochastic and then buy when the daily stochastic crosses on the same mentioned range. When the daily crossover happens, the weekly stochastic should not be in the overbought range. Best signals in this setup occur when both the weekly stochastic and daily stochastic cross together. One such example, in the case of DLF has been explained below.
Target - Continue to hold the stock till the daily stochastic indicator does not signal a typical sell signal (that is, bearish crossover).
Stoploss - Stop loss in this strategy is fairly simple. Either this strategy works or it fails. Thus whenever the signal comes, do not take loss of more than 3% on the trade or keep stop loss of previous swing low. This strategy has a success rate of about 60%.
Note - This is not an investment strategy. Hence, do not continue holding the stock. This is pure momentum play. Buy it and exit once you get good gains and when the sell signal emerges. For better understanding I have cherry picked this example. Like all the strategies, even this is fallible.
Time Frames - You have to pick out proper pairs to execute this strategy. Here I have used Daily - Weekly pairs as I don't believe too much in shorter time frame trades. You can experiment by using 30 Min - 5 Hour pair or 5 Min - 30 Min pair. But bear in mind that there will be a lot many false signals as you continue to shorten the time frame.
Tools Candlestick/Bar Chart, Stochastic (8,3,3) Daily and Stochastic (8,3,3) Weekly
Trade Setup This setup was made popular by Robert Miner. The basis of this setup is to use momentum of 2 time frames to get into trades. Though Robert Miner also showed how to use E-wave and fibonacci with this setup, we will essentially stick only with the basic dual direction momentum setup.
Trading the Setup - Switch to the daily chart mode to use this setup. Below the main price window, you must have Stochastic (8,3,3) daily time frame and Stochastic (8,3,3) weekly time frame. It is absolutely essential to have both the stochastic windows (one for daily time frame and other for weekly time frame) on the same time. We enter the trade when the Weekly stochastic has crossed over in the oversold range (usually should have crossed around the 20-30 range) and is pointing up. We then pay attention to the daily stochastic and then buy when the daily stochastic crosses on the same mentioned range. When the daily crossover happens, the weekly stochastic should not be in the overbought range. Best signals in this setup occur when both the weekly stochastic and daily stochastic cross together. One such example, in the case of DLF has been explained below.
Target - Continue to hold the stock till the daily stochastic indicator does not signal a typical sell signal (that is, bearish crossover).
Stoploss - Stop loss in this strategy is fairly simple. Either this strategy works or it fails. Thus whenever the signal comes, do not take loss of more than 3% on the trade or keep stop loss of previous swing low. This strategy has a success rate of about 60%.
Note - This is not an investment strategy. Hence, do not continue holding the stock. This is pure momentum play. Buy it and exit once you get good gains and when the sell signal emerges. For better understanding I have cherry picked this example. Like all the strategies, even this is fallible.
Time Frames - You have to pick out proper pairs to execute this strategy. Here I have used Daily - Weekly pairs as I don't believe too much in shorter time frame trades. You can experiment by using 30 Min - 5 Hour pair or 5 Min - 30 Min pair. But bear in mind that there will be a lot many false signals as you continue to shorten the time frame.
?????????
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