|
PureBytes Links
Trading Reference Links
|
In response to your questions about my indicator, it's nothing more than a
cumulative sum of the volume flowing in and out of the individual components
of each index (the NDX & OEX have a 100, the DJIA - 30). That's why I use
my Windows on Wall Street program and not TradeStation. TradeStation only
lets you follow no more than 50 securities (data1, data2, .etc).
Indicators indicate. It's just as simple as that. Most of the time they're
in sync with the market/security/commodity. To me they only give signals
when they are out of sync with the market. I don't care for Stochastics or
RSI or any other oscillator type indicator. If I would use them, I wouldn't
look for cross-overs or over-bought or over-sold levels (e.g. <30 or >70),
but rather divergences in amplitude. For example if a security is at the
same level it was two weeks ago but the amplitude of the
Stochastic/RSI/MACD/etc is lower - I'd look to sell the sucker.
The indicator I put up hit a new low in both the OEX and NDX. I would think
that these markets should follow and hit new lows also. It is guaranteed?
Of course not. It is just indicated. Like most technicians I like to sell
double tops and buy double bottoms, especially when (insert your favorite
indicator) fails the match its previous amplitude.
Trading is gambling. I'm the idiot who will ante all night until he has a
playable hand and then bet big. Will I win every one of those hands? Of
course not! But over the years I've made more money playing poker with my
buddies than I've lost. The same principle applies to the stock market. If
you play enough of the unconfirmed peaks or troughs, you will experience
losing trades but on balance should make money.
Having said all that I also like to buy breakouts - buy high and (hopefully)
sell higher. Of course, you can sell low also. Again breakouts must be
confirmed by, yep, you guessed it, an indicator. For me it's a volume
indicator. A couple of weeks ago an RT'er astutely observed that volume is
less of a good indicator as it once was. He reasoned, correctly I believe,
that institutional buying has distorted much of the predictive power of
volume. I would agree to a point. Volume as an indicator seems to work
better for NYSE stocks than NASDAQ and volume usually works better for low
to mid-cap companies than it does for large cap or heavily traded
securities.
Forgive my rambling. For you literary types I call it my stream of
unconsciousness. Oh yes, by the way, I do except to shortly see new lows in
the NDX and OEX. Because an indicator is indicating.
-------------------------- eGroups Sponsor -------------------------~-~>
eGroups eLerts
It's Easy. It's Fun. Best of All, it's Free!
http://click.egroups.com/1/9698/0/_/152424/_/972534952/
---------------------------------------------------------------------_->
To unsubscribe from this group, send an email to:
realtraders-unsubscribe@xxxxxxxxxxx
|