Get started

Oscillators

Problem with RSI1. No Entry - Exit Pair As clearly seen, RSI shows 3 OverSold or Long Entry Regions but do not show even 1 OverBought - Long Exit Regions. Price falls after each Long Entry Regions 1 and 2. False Buy Regions. Most of the traders have no clue on when to sell, if they buy at Entry Regions. 2. Remains in OverSold or Long Entry Regions for so long and Price is falling continuously. As seen, entered into OverSold region @ Low of 2835 and finally came out of the region @ Low of 2808 Again, Most of the traders have no clue on when to sell, if they buy at this entry regions. Either most of the traders will loose on profits, if at all they make or will make losses, as price is seen to be falling and no clear indication of Exit. ---------------------- Retracement and Reversal indicator 1. shows Red @ 2900 levels, RSI was not in OverBought Region. 2. does not show Green at Entry Point 1 and maintains Red. No false Buy Signals. 3. shows that this Entry Point 1 and Entry Point 2 are infact Retracements in a down trend as shown by "2. Single Level Retracement" - Gray regions. For more about Retracement and Reversal Indicator check out details at "Retracement and Reversal" indicator never predicts.
NSE:BAJAJ_AUTOEducation
by mehul1974
Nifty: A Simple Strategy Yielding Lacs.I am surprised to see how this simple strategy could yield such handsome return in the Index futures. Time Period= 1 June till date Chart= 15 min. Rules: 1. Divergence on Stochastics associated with inverse price movement 2. Entry @ break above/below immediately preceding "minor" swing high/low 3. Stop @ below/above immediately preceding "significant" swing low/high 4. Target @ immediately preceding "significant" swing high/low point 5. Would not trigger entry on gap openings, wait for price to pull back to entry or else trade will be missed 6. After entry, if target missed by few points then close position on break of a succeeding minor swing or consolidation pattern, whichever hits earlier 7. Minimum Risk to Reward Ratio should be 1:1 or else trade will be missed. 8. No support or resistance from higher time frame taken into account 9. All the entries taken with Stop loss and Limit orders. 10. Carry forward as long as target or stop is not hit. Trades: Trade1=33 pts. Trade2=16* Trade3=31 Trade4=34 Trade5=32 Trade6=13* Trade7=47 Trade8=37 Total= 243 Profit on single lot= 243*75=18225 For earning 1 Lac or more one should have traded at least 6 lots. * In Trade 2 and 6 target was missed by a few points so as per rules the position is closed at the break of succeeding consolidations pattern. #Trade missed @ Divergence 3 because of poor RRR Although this strategy yielded 100% success with no Stops hit yet it should be noted that we totally missed the shorting opportunity from 9700 to 9565 on 22nd June. The strategy might be successful in sideways to moderately bearish/bullish environment. Will it be good in a trending market is still a question mark for me, perhaps we will get the answer in coming days. Kindly cooperate if am wrong in my calculations somewhere but i suppose the purpose of this post is clear to everybody. Trade safe, stay healthy. Best Regards Afraidtotrade
NSE:NIFTYEducation
by Bravetotrade
35
Stochastic: Oscillate the Right Way – A study of SBIDeveloped by George Lane in 1950 – Stochastic (SO) is a momentum oscillator, that is, it follows the momentum of price. Its value oscillates between 0 to 100. The general interpretation of SO is that stock is overbought when SO value is above 80 and oversold below 20. But to what extent this interpretation is correct? Let’s find out. I am taking State Bank's weekly chart (random pick) 2013 onwards. Although the study is applicable to all time frames yet it is more reliable on larger timeframes. The smaller timeframes can always be used for better entries and exits. I am taking only %D line which is 3 period MA of %K (not showing here on SO chart) which represents the current value of SO. The reason for choosing %D is that it is smooth and less noisy. A cross of %K over %D is used as buy and sell signals. But a lot of false signals are generated through this system as it noisy in case of volatile stocks, so I am ignoring this system in this study. Overbought Zones and Rallies Let’s first concentrate on points where SO cross above 80 Point C: Stock rallied 57% Point E: Stock rallied 20% Point I: Stock rallied 29% Point K: Stock rallied 7% Oversold Zones and Falls Now concentrate on points where SO value crossed below 20 Point a: Stock fell -25% Point c: Stock fell -9% Points e,f: Stock almost flat Point g: Stock fell -11% Point h: Stock fell -33% So is it a good practice to sell a stock because SO is above 80? Absolutely not, rather when SO value crosses 80 a buy should be triggered because stock is in bullish momentum. Same is true for SO cross below 20, it generates sell signal. Divergence and Price oscillation: Another Interpretation Another interpretation of SO is through Divergence. Means when price is making higher peaks but SO is making lower peaks or stock making lower troughs and SO making higher troughs. Between points b and d: huge divergence on SO, Price flat at D1; rally 93% At F: Divergence with rising price (D2); initial fall 23%, total fall 55% At i: Divergence with price fall (D3); rally 80% At J: Divergence(red line) with price rise (D4), fall 16% but SO didn’t touch 20 this time, while it did in above 3 cases At L: Divergence(red line) with price rise (D5); Fall so far 10% So will it be right to trust divergence? Absolutely, as it is followed by massive price movement. But will be right to trust only divergence for buy or sell? Absolutely not, it should always be used in conjunction with other price action signals. And now the big question, what is the present scenario in this chart? Look at the divergence on SO (thick yellow line) and the price movement of the stock and interpret yourself. Play safe, stay healthy and like if u can.
NSE:SBINEducation
by Bravetotrade
10
FTSE : How to trade with RSI Indicator ( Educational)I explained how to trade high probability trades with using RSI Oscillator in Trending market. RSI Oscillator is fast moving indicator, Observe RSI Divergence failed to change the direction but still you get the pull back, Notice before price fall RSI hitting bottom that is key indication Price is trying to make higher high. Trend is strong on Upside those divergence are profit booking zones. Feel free to ask your doubts.
TVC:UKXEducation
by Jnaneshsd