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I wouldn't use stochastics at all to determine
overbought or oversold levels on an intraday chart!
The 'Stochastic' indicator just looks at the last N
number of bars and figures the N Bar high, and N bar
low (basically the N bar range) and lets you know
where the current price is in regards to that N bar
range. Where 100 is a N bar high and 0 is an bar low.
So lets say you use 50 as the numbe of bars. Would you
say that if the price of the instrument reaches a 50
bar high it is oversbought? I would say it has great
momentum and its making a new high, which are bullish
signs as far as I'm concerned.
Then again, thats my opinion.
H
--- Brian Keith Voiles <admagic@xxxxxxxx> wrote:
> Dear Group,
> Based on your experience... what Stochastic settings
> are best for knowing
> when the S&P is more likely to be in an overbought
> or oversold situation?
>
> Or, do you recommend RSI, LRS, or something else to
> determine the
> likely state of the overbought-ness or oversold-ness
> of the market? If so,
> what settings are best, and what is the most useful
> way for a day trader to
> interpret the probabilities?
>
> Thank you -- I appreciate these groups very, very
> much.
> Sincerely,
> Brian Voiles
>
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