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Are these daily bars, or intraday?
Either way, one is looking for the slowing of momentum, which should
increase the odds of a turn.
Try using a bollinger band and an oscilator.
Variants are keltner and slow stoch, and cci.
(1) in trend mode the both bb and osc will be extreme.
(2) in pullback mode the osc will retest the extreme,
(3) but the bb wil regress to mean,
(4) trade as both the osc and bb signal reversals
In day trading, two time frames, such as 5 min and 2 min, help.
So daily and weekly might be good.
I no longer use these types of indicators.
Except CCI which is very responsive.
I am currently looking at price levels, S/R, etc.
Hope this helps,
Eric
----- Original Message -----
From: "Chris Evans" <evanscje@xxxxxxxxxxxxx>
To: "Omega List" <omega-list@xxxxxxxxxx>
Sent: Tuesday, March 23, 2004 9:04 AM
Subject: Trading question
> Does anyone have an idea they would share or one they have read that tries
to solve the following problem:
> If you are trying to build a system where a reversal approach seems to
work better than a breakout system and you have found an oscillator that
gives you decent oversold signals. What is a way (the best way) to tell
when the signal is too early or the market is going to continue to break
down (if a buy has been signaled).
> I have tried things like looking for the open to be> the close or a
moving avg of opens to flip above an average of closes (fails) .. I have
tried to look and see if the Osc. is oversold for N consec days then get
out. I have tried waiting for the osc. to cross above an oversold level but
this can happen so late that the entry level is much worse. If you wait for
a cross above a level like say 10 (scale = 0-100) then you have a problem
picking that number since if you pick a very low level then you'll miss many
trades and if you pick a higher level that is too high then the osc. may
have to rally too far for a good signal to be given.
> Any thoughts?
> CJE
>
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