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I suggest MACD(13,34,89) or 89 time series MA for long term trend. The
oscillator aspect usually gives a 5-10 day trade with say CCI(13) with 200
and -150 triggers. for longer terms, CCI(40) may stretch it out.
A StochRSI(13) is used by many to go in and out up the right side of the
mountain.
What you failed to say is what type trader or investor you are. Say a stock
goes from 15 to 55 in a year, would you set tru the corrections to get
there? Or do you picture 6-8 trades? Your individual mindset decides how you
would use the indicators. IMO we have the best under $500 system building
software out there. Play with it, build YOUR system, so you trust it. When
opinions say the market will crash or soar, you can turn a deaf ear because
your system will provide exit/entry points on your stock. It is inline with
your view of reality.
For those that don't know who they are, they face a hardship of finding out
with real money. For those without a plan, get one. Even the guy that puts x
dollars in a dinosaur every year can come out ahead but he has to have that
mindset and plan.
Richard Estes
-----Original Message-----
From: Steven Buss <sbuss@xxxxxxxxxxx>
To: Harvey Pearce <hpearce@xxxxxxx>
Cc: Metastock-list <metastock-list@xxxxxxxxxxxxx>
Date: Saturday, November 22, 1997 10:30 PM
Subject: Re: Oscillator and Trend Following Indicator Integration?
>Thanks to Harvey and to all who have replied to my question.
>
>The "received wisdom" does seem to be that oscillators work best in trading
>range markets and that trend following indicators (by definition) work best
>in trending markets. And this makes sense.
>
>But I wonder about one thing...
>
>Don't oscillators also work well in trending markets when the market is in
>an extreme position (as defined by an oscillator) AGAINST the trend?
i.e.,
>in an up-trending market, when the stochastic is oversold, then, the
>stochastic indicator does provide information of significant value?
>
>So, the restated "received wisdom" principles might go something like this.
>
>- Trend following indicators work well in trending markets.
>- Trend following indicators don't work well in trading range markets.
>- Oscillators work well in trading range markets.
>- Oscillators also work well in trending markets when they have extreme
>values that run AGAINST the trend.
>- Oscillators don't work well in trending markets when their value is
>consistent with the trend.
>
>Thoughts?
>
>P.S. The Elder insight on this is that the trend is best found by
examining
>a trend following indicator at a higher level timeframe than one wants to
>trade. (e.g., trend established by weekly bars for trade timing determined
>by daily bars)
>
>Thoughts?
>
>Steven Buss
>Walnut Creek, CA
>sbuss@xxxxxxxxxxx
>
>-----Original Message-----
>From: Harvey Pearce <hpearce@xxxxxxx>
>To: Steven Buss <sbuss@xxxxxxxxxxx>
>Cc: Metastock-list <metastock-list@xxxxxxxxxxxxx>
>Date: Saturday, November 22, 1997 10:25 PM
>Subject: Re: Oscillator and Trend Following Indicator Integration?
>
>
>>Steven/
>>
>>You bring up a point that I've been toying with. I was hoping that one
>>of the more experienced members would reply, but since they haven't I'll
>>make my own low grade input. I'm a beginner with a greater investment
>>in books than securities, so evaluate this accordingly.
>>
>>The received wisdom is that oscillators work with trading ranges but not
>>with trends. If this is true then it is more a case of switching
>>between oscillators and trend-following indicators than of combining
>>them.
>>
>>There is a commercial system called Catscan. The developer, Randy
>>Stuckey, claims that it is two systems in one: one for choppy markets
>>and one for trends, with a choppiness indicator to switch between them.
>>
>>Perhaps Stochastics, which tells us where we are now relative to where
>>we've been, could be used in this way. Once it pegs at one end you're
>>in a trend. Elder points out that it is easier to distinguish between
>>trends and trading ranges when you're looking back at a completed chart
>>than at the "hard right edge" as you try to get a glimpse of the future.
>>
>>I've tried to make an indicator of my own to show what percentage of the
>>lookback period has had highs greater than the current high, but ran
>>into limitations of the MS Indicator Builder. (We need a Visual Basic
>>add-on). I'll post an accompanying message to see if anyone can help.
>>
>>For references I'd recommend the following.
>>
>>Trading for a Living, by Alexander Elder.
>>Technical Analysis of the Futures Markets, by John Murphy.
>>Schwager on Futures: Technical Analysis, by Jack Schwager.
>>
>>Harvey Pearce, Victoria, B.C., Canada
>>
>>=====================================
>>
>>Steven Buss wrote:
>>>
>>> My frustration the last few days led me to try to get a handle on the
>>> Oscillator (e.g., Stochastic) vs. Trend Following (e.g., moving average)
>>> indicator issue.
>>>
>>> Maybe I've seen someone lay out a general strategy for understanding how
>>> these two indicator types can be used together and just don't
>remember...I'm
>>> sure there are multiple approaches.
>>>
>>> But I did come across Alexander Elder's "Double-checking beats
>optimizing"
>>> article in a little booklet he sells ("Trader's Guide to Day-Trading")
at
>>> his site for $10. If I had read (and understood <g>) this article just
a
>>> few weeks ago I would have saved myself some tension as well as a few
>>> dollars...His site is www.elder.com.
>>>
>>> Anyone know of anyone else who has specified a clear view of HOW
>Oscillator
>>> vs. Trend Following Indicators can be used together?
>>>
>>> Steven Buss
>>> Walnut Creek, CA
>>> sbuss@xxxxxxxxxxx
>>
>
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