European Forex Professional Weekly 2009-11-05

tadinda

Private, 1st Class
Messages
65
Use of Indicators

Hello Sive,

You know I read your analysis like the Bible and thank you once again for your help here. It is not normal to find a professional such as yourself to help us poor traders out.
I was also extremely happy to see that you will extend the pairs to include others besides EUR USD.
I am no pro. But if you need any help to collect data etc I will be more then happy to help as I will learn in the process.
MY only problem so far in following your thinking is how you are interpreting the indicators. As I said am not one of the smartest but I love learning. And this is the only feature which I have not grasped. Am sure a simple explanation from yourself would prove its weight in gold as your every word in these analysis.

Regards
Ernest
 

Sive Morten

Special Consultant to the FPA
Messages
13,800
Dear Ernest,
There is no shame that you are learning - vice versa, it's very good. I'm also try to learn all the time.
So, concerning indicators, it's a bit large theme to discuss in forum, but I try give you a compressed view that I hope will help a bit.
I use only 3 indicators - MACD, Slow Stochastic and Oscillator. We already discussed, how are they calculated. So
MACD - this is a trend indicator. When signal line is above slow line - trend is up, other way trend is down. But market has to have directional move (thrust is much better).

Stochastic - indicator of a weak players.

So, how I use them. Let's assume, that we have uptrend (based on MACD, remember?) of the market on 1 hour chart. When market reach resistance, Stoch begins to go south. Then, I use FIb support level on 5 min chart and watch, will market resume up move or not (5-min MACD should turn up and confirm in that way hourly trend). If it will, i check for MACD on hourly chart. If slow line holds signal - then trend is still in force, and I enter the market on buy side. (Example - is in my trade descriptions. The first one- is a pure trend trade, just look at indicators when I enter from Fib support).
Oscillator - is for Overbought oversold level estimation. It helps to enter or not in trades, it points where I should close position, it helps estimate levels or ranges where will be strong resistance or support. Also it helps in decision making about targets. For example, I have COP and OP, but assume that level 1.50 is overbought level and it between COP and OP. So i will close my position on COP, because I can catch a strong retracement before market will reach OP due to extreme overbought.

It's just general description. THis is not my idea to trade like that - this is Joe DiNapoli method. So, if you feel that It comfortable to you - the best way is to learn the book.
Otherway is to ask definite questions in trade descriptions topics. It much simplier to explain this using examples.

Hope it helps,
Sive.
 
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