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Here are some suggestions to consider on use of the EWosc posted yesterday.
Other input is welcome.
1.
Use the (H+L)/2 input when price levels in the data set are in the same
ballpark as in intraday data, and use Log((H+L)/2) when they are in
different ballparks such as on daily or weekly or monthly charts when the
data set goes back years and decades.
2.
Set the K input to 0.8 for "80%" bands. The default is 1.0 or "100%" and
you may want to leave it there too for different instruments. The bands are
considered strength or breakout bands. Lower levels trigger earlier
breakouts.
3.
Insert the EWosc 3 times and use 3 different length inputs. These lengths
were for 60 minute bars and day bars, but may also apply to shorter
intervals.
5/17 for scalpers and little guys with tight stops
5/35 for position traders of 1 to 2 days
10/70 for commercials
4.
Lay horizontal lines at the -1.4 level when the trend is up. Place it at
+1.4 when the trend is down. This line is the "shakeout" line for the
little guys when the commercials are jerking price around for positioning
like occurred on Friday. When the Little Guy is shaken out but the
Commercial Osc is still above the -1.4 and turns up and crosses zero and
then crosses the upper breakout band like on Friday, well, you get the
picture.
5.
When the Commercial Osc is above the upper band, price is in wave 3. You
want to be long in wave 3 and ride with the commercials as they are in
control. Watch for divergences between price and the Oscillators indicating
the end of wave 3.
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