Agreed Ditch. I still look at the 60 but after a 1-4 hour
chart I do give it less credence when compared to the 14. So
lower timeframes using the 60 = more credence, higher = ok for
overall tend but generally too slow to consistently trade
with. So what does that mean for you jamesl? Maybe a
set-up I would give more credence to is losing the 60 on the Daily
but waiting for then the 14 to get overbought, check back with the
60 stoch, if it continues to trend lower and now the 14 overbought
then I look to short.
Does that make sense?
The problem can be when you short the actual action on some
lagging indicators then you short the bottom and the position
almost immediately goes against you unless you get a continued
emotional move (which happens more on stocks than indicies
IMO). By waiting for the shorter term indicator, and price,
to bounce you decrease the risk/reward - also, your sentiment might
change on the bounce and you realize the break was a false one -
just this schmucks opinion.
Right, the best set ups happen when they are both over bought or
over sold to the extremes, as this chart shows where the red arrows
happen, but this last trade of buying SDS $20.42 the 14 was
extremely over bought on the SPY:TLT but the 60 was not, there fore
it's high risk and looks like it may go against me. I should have
waited till they were both at extreme levels.
Agreed Ditch. I still look
SPY
Posted by tom on 13th of May 2011 at 01:56 pm
Agreed Ditch. I still look at the 60 but after a 1-4 hour chart I do give it less credence when compared to the 14. So lower timeframes using the 60 = more credence, higher = ok for overall tend but generally too slow to consistently trade with. So what does that mean for you jamesl? Maybe a set-up I would give more credence to is losing the 60 on the Daily but waiting for then the 14 to get overbought, check back with the 60 stoch, if it continues to trend lower and now the 14 overbought then I look to short.
Does that make sense?
The problem can be when you short the actual action on some lagging indicators then you short the bottom and the position almost immediately goes against you unless you get a continued emotional move (which happens more on stocks than indicies IMO). By waiting for the shorter term indicator, and price, to bounce you decrease the risk/reward - also, your sentiment might change on the bounce and you realize the break was a false one - just this schmucks opinion.
Thanks Tom. Yes that does
Posted by jamesl on 13th of May 2011 at 02:04 pm
Thanks Tom. Yes that does make sense.
If I'm understanding correctly, I should look to the 14 & IF the 60 confirms (by going up), then ok.
If the 14 becomes overbought, and the 60 doesn't confirm...probably a false break.
Did I get it right?
Right, the best set ups
Posted by ditch on 13th of May 2011 at 02:02 pm
Right, the best set ups happen when they are both over bought or over sold to the extremes, as this chart shows where the red arrows happen, but this last trade of buying SDS $20.42 the 14 was extremely over bought on the SPY:TLT but the 60 was not, there fore it's high risk and looks like it may go against me. I should have waited till they were both at extreme levels.
http://screencast.com/t/OsilFjGb6txA