StockFetcher Forums · Filter Exchange · How to finding stocks to daytrade<< 1 2 3 4 >>Post Follow-up
glm47
51 posts
msg #44156
Ignore glm47
modified
5/24/2006 9:39:21 PM

Ill offer what I can in response.

Quote 'When I said "what other signal do you look for to make sure", I meant "what other signal do you look for that is a signal". I realize there are no absolutes and nothing in the stock market can be predicted 100%. As of right now, I use RSI(2) < 1, I look at trendlines, I use the ema(150), support and resistance levels. Anything else?'

The period disparity between your 150 and 2 is so huge that it is unlikely you will see anything meaningful. The 150 will change so infrequently you are practically using RSI(2) only and that would be suicide. It is tradeable if you use it in conjunction with Volume however.

For starters, knowing nothing about what indicators you are familiar with, I suggest changing your EMA from 148 to to 20 or replacing it with the MACD on ALL of your charts. The default MACD parameters of 26,12 will do fine but you might like them more at 20,9. The MACD is essentially two Moving averages but the histogram additionally adds another level of insight. There was a recent thread on MACD understanding, take a read of that. Another ESSENTIAL indicator is Volume. In fact, it is the single most important indicator besides price. Again, refer to the archive threads or online tutorials to get an understanding of the kind of volume patterns you need to recognize. Lastly I suggest you also add an Oscillator to your charts. Play around with the CCI and the Stochastics and see what you like. Try using various parameters.

http://www.stockcharts.com/education/IndicatorAnalysis/indic_stochasticOscillator.html

http://www.prophet.net/learn/taglossary.jsp?index=C&entry=CCI

So to recap, at a minimum you should be using the MACD, Volume, RSI(2) and an Oscillator like CCI or Stochastics. What you are looking for is multiple indicators all giving you the same UP or Down signals. When you have lots of things simultaneously telling you the same thing, it significantly improves the chances of the signals being correct...

Once you are comfortable with those, you need to understand the significance of the 50MA and 200MA too.

Quote 'I realize there is no magic indicator. It has been said that using RSI(2) < 1 and waiting for green is a very solid sign to jump in long. However, I am asking how it is a sign to go long when it can just as easily head south. I am asking why waiting for green will give you an edge, even if the RSI(2) is < 1. I was hoping TRO or someone else knowledgeable could explain why waiting for green gives an edge'

Search the archives for 'Wait for Green' the guys who developed this methodology explain it far better than I can but here is a short synopsis:

Waiting for green means not entering a trade until the momentum is in your favor. By momentum I mean upward or downward price trend movements. If a stock price has been dropping steadily, the only way you can be reasonably sure it has reversed and is trending upward again is to wait for the current candle to turn green and be closed. It does not turn green in color unless the stock price has moved above the opening price of that candle and it can still turn red if it has not closed. Many respected traders have recommended not entering a stock until its price moves above the highs of the previous candle because that was the most recent point of resistance and once resistance is violated, stock prices often move upward more. They usually recommend strong volume in that situation too. Of course, there is far more complexity to this rule and you should read up on it.

The RSI(2) has a tendency to get stuck at 1 and 99 and when it does, you cannot be sure when the current trend is over. Do not enter until your RSI(2) has moved off of the top or bottom.

Have you noticed a common theme that seems to permeate my responses?

STUDY

Good luck with your trading endeavors.



TheRumpledOne
6,359 posts
msg #44165
Ignore TheRumpledOne
5/25/2006 7:48:17 AM

RSI(2) on a 1 minute is way too volatile.

Use RSI(2) on a 60 minute chart.

You can use RSI(2) on a 15 minute chart for confirmation.

HTH.


clam61
92 posts
msg #44189
Ignore clam61
modified
5/25/2006 11:55:44 PM

http://www.slengr.com/tie1.gif

btw, here is the setup i have been using so far. 1 minute chart, rsi(5). i have marked RSI divergence with red lines

i use TRO's middle of the range method and a bottomed or topped out rsi(5) for quick flips.

when there is divergence, i load the boat. i often sell too quickly i think, but at least it's a profit.

id like opinions on...

1. chart setup. critiques and improvements.
2. by looking at this chart, where else i could have made a move and what signal i missed. could be a lack of other indicators, etc.

thanks!



clam61
92 posts
msg #44188
Ignore clam61
modified
5/26/2006 12:32:53 AM

TRO and glm47

First of all thanks again for taking the time to help.

// -----------------------------------------------------
// TRO
// -----------------------------------------------------
"RSI(2) on a 1 minute is way too volatile.

Use RSI(2) on a 60 minute chart.

You can use RSI(2) on a 15 minute chart for confirmation.

HTH."


1. Could you explain how to use RSI(2) on a 15 min for confirmation?
Perhaps a sample scenario?

2. Also, I have been using RSI(5) on a 1 minute chart. I have been "scalping" I guess you could say for very small percentage gains, but I have been using $10K to $60K at a time to make a couple hundred dollars here and there. Is this abnormal or crazy?

3. What is your exact chart setup for trading?

4. Below are links to what I traded today, TIE. One is a 60 minute chart with RSI(2) and the other is a 15 minute chart with RSI (2). Could you help me with what to look for? I dont understand how to use RSI(2) in this situation
glm47:

http://www.slengr.com/tie60.jpg

http://www.slengr.com/tie15.jpg


// -----------------------------------------------------
// glm147
// -----------------------------------------------------
1. " I suggest changing your EMA from 148 to to 20 "

What am I using the 20 EMA for? The price is always supposed to come towards the EMA right?

2. "or replacing it with the MACD on ALL of your charts. The default MACD parameters of 26,12 will do fine but you might like them more at 20,9"

default parameters are

fast period: 12
slow period: 26
signal period: 9

when you say "26,12" or "20,9" what parameters are you giving? you only gave 2 out of 3
confused.

3. is this the thread you were speaking of?
http://www.stockfetcher.com/stockdb/fetcher?p=forum⊂=view&fid=1002&tid=43918

i know how macd is calculated and to look for divergence. but what else? anything to refer me to?

4. " Another ESSENTIAL indicator is Volume. "

What exactly do I look for? I know I should look for Volume increase, but are there any finer points to look for?


5. "So to recap, at a minimum you should be using the MACD, Volume, RSI(2) and an Oscillator like CCI or Stochastics"

Isn't stochastics a momentum indicator like RSI?

6. "Once you are comfortable with those, you need to understand the significance of the 50MA and 200MA too. "

Could you explain or maybe point me towards a thread that talks about 50ma nd 200ma?




clam61
92 posts
msg #44239
Ignore clam61
5/26/2006 6:05:03 PM

BUMP


clam61
92 posts
msg #44338
Ignore clam61
5/28/2006 8:20:02 PM

BUMP


nikoschopen
2,824 posts
msg #44339
Ignore nikoschopen
modified
5/28/2006 9:18:49 PM

[sorry, wrong thread]


nikoschopen
2,824 posts
msg #44345
Ignore nikoschopen
5/28/2006 10:32:25 PM

I enjoyed looking at ure chart. Although I can't comment on the specifics since it's largely beyond the purview of my own trade setup, I have uploaded a screenie of what I tend to focus on an intraday basis. I hope that it will shed light from yet another perspective.

Link: http://img104.imagevenue.com/img.php?loc=loc232&image=69374_sample.jpg


clam61
92 posts
msg #44354
Ignore clam61
5/29/2006 1:37:49 AM

hey thanks for the help. i want to check out your image, but the link is broken


nikoschopen
2,824 posts
msg #44358
Ignore nikoschopen
modified
5/29/2006 4:12:14 AM

Clam,

Make sure you don't include "link:" at the front. Otherwise it should be fine.

[Edit] Hmm, maybe the link is broken after all. Here's the new link:

http://img23.imagevenue.com/img.php?loc=loc103&image=70928_sample.jpg

[Re-edit] Clam, are you by chance using Firefox? Switch and view the above links in IE and they should work fine. As a Firefox user myself, I found that part of the URL gets modified in the process.




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