Site Requests...

Over the weekend I asked for ideas of what you would like to see on the site. On thing mentioned was how some common indicators can be used for those not using 3C.

There are some indicators I stay away from like OBV, I don't think it works well at all. I'll add more concepts to this discussion as we go, but momentum indicators are pretty good, like MACD Histograms and Wilder's RSI.

I prefer to use unconventional settings so I see something the crowd may have missed, so I use a MACD setting 2x as long as the normal, it also reduces noise and shows the trend better.

This is a 10 min chart of the SPY, MACD is in blue set to 26/52/3, Wilder's RSI is in white set to 14 which is typical, longer settings an be difficult to read in RSI, although I do use 22 often.

When price was moving up in the SPY on this 10 min chart, MACE and RSI also moved up with it at the green arrows, that is confirmation of the trend, when they stopped moving up with price, they were negatively divergence and that shows there's a problem with the trend. As almost always, a reversal, even on a 10 min chart, is a process, not an event, it takes a little time and is "U" shaped, not "V" so you can use this to your advantage to re-arrange your portfolio. On the recent positive divergence in white, MACD and RSI were moving up while price was moving down, this is also highly indicative of a reversal and you have some time in the process to re-arange your portfolio.

It's important to look at as many different intraday and daily timeframes as you can, shorter timeframes and signals represent shorter trends, longer ones represent longer trends. The more you compare, and the more pieces of the puzzle that fit, the better idea you will have regarding what to expect in multiple trends that all occur at once in different timeframes.

 Here I put Wilder's RSI period 14 in DIA's price window, you see all of the signals from confirmation, negative divergence, positive divergence. However, everyone can see this.

In this window, I left RSI, but I made it invisible and added Rate of Change to RSI, note how much sharper and clearer the signals are. Sometimes this makes all the difference.

I would stray from the pack and use your own settings, think for yourself rather then what the books say-everyone knows that and what everyone knows, isn't worth knowing. Just make sure they have worked in the past.


By the way, it looks like the market is finishing up with that pullback