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Chapter 13, Part II. Leading Indicators – Oscillators. Page 5

Discussion in 'Complete Trading Education- Forex Military School' started by Sive Morten, Dec 20, 2013.

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  1. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Chart #3 | EUR/USD Daily and DiNapoli Oscillator Predictor
    [​IMG]

    See, the current session is not over yet, but the oscillator already shows levels of overbought (OB) and oversold (OS) for today’s trading day. You can see them in the left bottom corner – OB = 1.4623 and OS = 1.4014. And these levels will remain stable during the whole day, despite price action. Now imagine that you use this oscillator on weekly or monthly time frame? You have levels that hold constant during the whole week/month and where the market will meet resistance or support if it will get there. So, this is also a leading indicator.

    Commander in Pips:

    3. DiNapoli MACD Predictor (MACDP). This is derivative indicator from simple MACD. It shows the precise price at which MACD will show line crossing and trend shifting. Also this level is known 1 period ahead of time. Look at chart #4 – when MACD shows trend shifting by line crossing, the red line (that is MACDP) crosses the chart line. So, MACDP shows 1 period ahead of time the price level at which the trend will shift due MACD indicator.


    Chart #4 | EUR/USD Daily and DiNapoli MACD Predictor
    [​IMG]

    So, as you can see my approach to leadership is quite different to the common one. I need indicators that really have some leadership properties – be stable ahead of time despite at the most recent price action. So, using them, I know ahead of time – where will support stand, at which price will the market be overbought or oversold and when a trend will shift. These are leading indicators.

    Although may be you will not be able to get OscP and MACDP, still you may use most part of them. Fib retracement and extensions are available for you, so are trend lines. Also you may apply formula that we’ve specified, for estimation oversold and overbought price with Momentum indicator.

    This lesson in Forex Military School owes a great deal to Joe DiNapoli's methods, and uses a number of Joe's proprietary indicators. Trademarks and Copyrights: Oscillator Predictor, MACD Predictor are trademarks of Coast Investment Software Inc.


    P.S. This lesson was written by Sive Morten, who has been working for a large European Bank since April of 2000, and is currently a supervisor of the bank's risk assessment department. Sive's knowledge of forex market and banking industry is vast and quite complete. If you have any specific questions about forex, banking industry, or any other financial instruments, please post them on the next page and Sive should answer soon.


    Note: FPA ranks are earned in the battles against scam, not in the classroom.
     
    #1 Sive Morten, Dec 20, 2013
    Lasted edited by : Mar 25, 2016
    Hamza Samiullah and fran alvarez like this.
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