How to trade with an oscillator

Nice...Kaisar...also see the positive divergence at your buy point...giving one more reason to buy....

Best wishes,

Smart_trade

dear sir i am big fan of slow stoch..............i read this intresting and very confusing day trading setup in a book.........since we have a great threat on slow stoch divergance,and on dual time frame momentum i am posting this setup here..........hoping i am not wasting your valuable time.........


this setup is very much similar to prides intraday strategy, but it uses slow stoch divergence as an entry signal..........


1) use 18 day adx or dma to measure the strengh of daily trend

2) check the direction of short term trend by using slow stoch in 30 minute time frame

3) use 21 period slow stoch on 3 minute time frame


4) entry is after the divergenc between 3 minute stock chart and 3 minute slow stoch chart


5) the first point of diverge must occur with stoch either above 80 or below 20






i am unable to understand this setup............please tell me your opinion

@rananjay00007
Hi
(1) Here EOD chart is used determining or selecting stocks which r in strong trend .This is a home work u should do it in off mkt ie b4 opening of mkt.The rules for ADX are (i)ADX less then 20 indicates weak trend if confirmed by low volume



(ii)ADX crossing 20 indicate start of trend




(iii)ADX sleeping from high crossing bellow 40 indicates current trend is losing strength.



Say 4 BAJAJHIND ADX is near 40 and it is heading still upward hence it is in strong dntrend(DI- >DI+)




(2)As soon as market opened we should look for short for the stock in dntrend selected by EOD chart.In live mkt it isnt necessary to check the EOD chart.Never go long for the stock in dntrend confirmed by eod chart.



(3) Divergence as you mentioned is confusing. How can we take position at the beginning of divergence ?Ruther we can take position each time STS crosses bellow from extreme and exit for +ve Div.and vice versa.Pls correct me if I m wrong.:thumb:

Hi ST,

Would be great if you can attach few charts to show how do you do it?

Regards
Raghav

Hello Raghav,

Scalping actually should be done in sideways market when market is going up/down by 2-3 points but with STT and taxes 2-3 points scalps are no longer profitable...one needs 8-10 points profits to make it profitable....

In the attached chart I have marked sone points where the moving average direction is down, market is trending down, identify a small NR5 or NR7 bar or inside bar, sell the low of this bar with high as a stop....cover 1/2 position once 2:1 reward /risk is achieved...then balance position trail the stop to high of successive lower bars.

Here the trick is to identify trending market and a small bar indicating a possible pause in the trend....chart shows a few locations, red line is short and blue line is stop. A pure R/R play really once you have trend in your favour...

Best wishes,

Smart_trade

Posting 5 min chart of Bank Nifty Futures for 26-03-2010.See how oscillator remaining in overbought zone for more than 5 bars indicated a strong up move coming in BNF...and it did come....

Buying above a 5 min pivot high with a stop loss kept at pivot low after the oscillator has spoken makes a great trade.....a few such definate trades are enough to be profitable. We are stacking the odds in our favour by waiting for oscillator to give indication.

This is one of the ways I use the oscillators........

Smart_trade

Hello ST,

:clapping: One more gem of a thing.

As pointed out by you these 2 really haunt a trader especially when its range bound.

1.RR Ratio
2.Self:Brokers/state Ratio

For me I am getting 1 Paisa each leg for nifty ( Apprx Rs. 90 for Nifty and Rs.35 for Minifty respectively )at current levels and 2 paisa each leg for Cash segments and hence can afford to scalp agressively.

Regards
Raghav

Hello ST,

I trade your ( Sorry, now even Mine method for a tf of 2-3 days .For me 5 min chart makes too much of a noise hence use 10 Minutes .This trade went for 6 days ( from 23rd to 29th) .I just danced to the tune of the market and what I got is depicted in the chart.

In pursuit of newer highs bought at the closing hours when it dipped. Hope master approves my decision to hold the long .



Regards
Raghav

+48

Regards
Raghav

Hi ST,

Since last 5 weeks I really did follow this method religiously along with BB and it gave me phenomenal results.Hardly it fails to deliver.

I would like to post charts whenever I get doubt .Pls take your free time to address.

Today first up Stoch stayed in OB for >5 bars . Bought the dip. Areas are marked.

Then sold break of PL at the top. My question is - can we consider that _ve divergence for selling or keep quite during that correction and accumulate the dips?



Here 30 Minutes chart loudly shouts "Buy buy buy"



Pls evaluate my trade .

Regards
Raghav