Oscillators

[osho67]

I am using YM chart on QT with price feeds from IB. First I started using only moving average period 5 or 10 on one minute chart. I realised this worked well sometimes and not at other times. Reading Murphy I realised that MA will only work in a trending market but not when market is mocing sideways.

For sideways market some oscillator is required. I donot know which oscillator to use. I am requesting opinion from other traders as to which oscillator will give correct reading more number of times than the others.

Please help so I can improve on my entry and exist signals. All comments, criticisms would be much appreciated. Thanks

 

[rglenn]

Hi Osho67

The only Oscillator that has an element of future prediction built in is the MACD oscillator.

As it has a leading element as well a lagging element associated with it.

There many places on the internet that you can research this.

I have included a link below:

www.stockcharts.com/education/IndicatorAnalysis/indicators3.html

All the best

 

[FTSE Beater]

Hi RGlenn

I would disagree with MACD in this case because it is Moving average based and would show the same thing twice

<hr>
Hi Osho

I would go for either CCI or RSi as those seem to be the most popular

HTH

 

[osho67]

How about Stochastic indicator? I started monitoring this and did profitable trades two previous sessions. It seems it is not working very well today to give correct signals. What is the limitation if this indicator?Thanks

 

[rglenn]

FTSE Beater

You probably know a bit more about indicators than me because I don't use them myself.

I was just trying to help out as know one else was giving Osho any guidelines.

Cheers

 

[ZigZag]

osho67. Conventional wisdom states never rely on only one indicator. You have found out why the hard way. No one indicator can cover every cycle in any time frame.

 

[osho67]

Thanks

I am now keeping two indicators CCI and Stoch on the computer to see any divergence or corelation. I am quite encouraged till I get some shock!

 

[Grey1]

Take a moving average of a CCI to reduce minor cycles .. It is better than the rest ..

A good technique would be to hedge one signal against another .. For example

SHORT stockx with CCI > 100 and turning against LONG Stock Y with CCI of > -100 and turning

This is differential trading using osciallators..

An exmaple would be DELL against INTC.. The red Indicator is MACCI or MA of CCI..

Try to learn trading using price action and volume ,, far better than any indicator put to gether...

PS:-- you would be better off to long a stock which is trading below its VWAP .. That would reduce your risk level a lot.. INTC is just an OSC hedging example

 

[Grey1]

INTC

 

[osho67]

Dear Grey1

Thanks for your input. (1) What is tradestation? (2) I am only trying to trade YM futures. Is it possible you could kindly base your explanation in that context-would be much obliged.

 

[Grey1]

osho,

Tradestation is a professional platform for trading.

One of the most important issues in trading is risk management.. ( if not the most important ...) To reduce risk of each trade you can hedge two instruments against each other.. There are many ways to hedge and one of these techniques is what I have explained above..


To take advantage of hedging you need to find another instrument to hedge against YM such as a US stock ..

So you go long YM when your Indicators ( CCI or its MACCI gets OS ) and go short when the same indicator gets OB...

 

[mmillar]

Take a moving average of a CCI to reduce minor cycles .. It is better than the rest ..

Grey1,

I also think CCI is a pretty good indicator but by sticking it through a moving average you are just going to ruin it. I thought you were a price and volume man? Can you explain.

Cheers

mmillar

p.s.

Tradestation is a professional platform for trading.

TradeStation is a pile of pants . And I use it too. eSignal is a better charting package. IB is a better broker. edit - just noticed you are using 2000i. Different from 7.x

 

[Grey1]

mm,

CCI is too fast . Needs to be smoothed a bit to catch bigger cycles.. a 60% regressed form of CCI is much slower..

I am aprice and volume man ,.. CCI and any other TA indicator I mention is for other traders who have faith in them ..

 

[tykoon]

MACCI

Hello Grey1,

I would like to try MACCI in Sierra Chart. I found a .dll which plots a MA of CCI. But I am not sure which settings to give it. The options are currently set at;

CCI length = 14
Multiplier = 0.015
Smooth length = 5
MA type - SMA/EMA/WMA/LSMA = SMA

What would you suggest?

Thanks in advance

 

[Grey1]

Can I ask what instrument you trade ?

Rememeber if you use any indicators you have to use them as a confirmation tool only .. If you are going to trade based on RSI or MACCI or any other indicator, you wont have any edge..


regards

 

[tykoon]

Just learning at the mo. Paper trading Dow.

 

[Grey1]

Tykoon ,

I am in the middle of a trade ,, I explain as soon as I am out..

regards

 

[Grey1]

Tykoon,

I have to explain to you the original of these setting for you to understand why I can not give you a solid answer..
Market goes through cycle Up down Up down exactly the way day and night go through cycles.. The cycle for day and night is 24 hours but the cycle for the market is yet to be calculated ..
When you look at your watch , you can tell the time because the cycle length is 24 hours and you can at any time tell where you are by using your watch ,, SO your watch is your INDICATOR.

We use technical indicator such as MACCI or RSI to find out where we are relative to the top and bottom of the cycle to buy low and sell high .. But because we don’t know the cycle length we are only guessing ..
Lets go back to MACCI ..

I canot give you a best settings for any indicator specially for day trading because .. there are too much noise around distorting the cycle length ( like to day green span is making a mess of a perfectly reasonable day for trading ).

How ever if you really want to use the MACCI then you have to do a small experiment called curve fitting ..
Use few various settings.. and watch the DOW’s reaction to your indicators .. Keep changing the settings until you are happy with the indicator’s performance..

If you had more experience then I perhaps would explain more automatic and dynamic adjustment of the settings for MACCI .. But even that would not come to much good..

Remember use the MACCI only for confirmation and stick to Price and volume..

Why do not you have VWMA on your platform along MACCI.

regards

 

[tykoon]

Ok. Thanks Grey1.

I'll play around with the settings and see how it looks. I'm trying to just use price at the moment. But I'm always interested in checking out different techniques. There is no option for VWMA in the .dll, so i'll just have to use what there is.