Still learning, so bear with me.. Ok i keep staring at slow stochastics, they at the bottom of every chart i look at, so i wonder if we rerally back up, then we would have a whole set of divergences that would set up. I want the mkt to go down, but i keep thinking Ok if we get higher prices in indexes then the RSI's would be diverged like we see in .soxx already and fxa. PLease let me know if slow stoch. matter? YOur thoughts.
Hi Liz, Exactly how it works the stochastics acts like a trend but only for that time frame. So its best to find a time frame that you are comfortable with like a weekly or daily where you dont need to keep trading multiple times in 1 day. You can use any indicator you want so if its RSI you like you can use that aswell. But what I find with the Stochastics is that it provides a buy or sell point when you see the signals cross each other. Also as the signals hit the overbought or oversold area usually you can tell if it will reset its trend and continue that trend in the larger time frame. For example, if the trend on the daily Stoch. is up and the 60min stoch. bottoms then it is safe to assume that when it crosses up and out of the oversold it will mean a reset has been done and a continuation of the daily trend up keeps going. Hope this helps.
Still learning, so bear with me.. Ok i keep staring at slow stochastics, they at the bottom of every chart i look at, so i wonder if we rerally back up, then we would have a whole set of divergences that would set up. I want the mkt to go down, but i keep thinking Ok if we get higher prices in indexes then the RSI's would be diverged like we see in .soxx already and fxa. PLease let me know if slow stoch. matter? YOur thoughts.
ReplyDeleteHi Liz,
ReplyDeleteExactly how it works the stochastics acts like a trend but only for that time frame. So its best to find a time frame that you are comfortable with like a weekly or daily where you dont need to keep trading multiple times in 1 day. You can use any indicator you want so if its RSI you like you can use that aswell. But what I find with the Stochastics is that it provides a buy or sell point when you see the signals cross each other. Also as the signals hit the overbought or oversold area usually you can tell if it will reset its trend and continue that trend in the larger time frame. For example, if the trend on the daily Stoch. is up and the 60min stoch. bottoms then it is safe to assume that when it crosses up and out of the oversold it will mean a reset has been done and a continuation of the daily trend up keeps going. Hope this helps.