I would consider using the MACD Histogram as a counter trend indicator. MACD-H is mearly messuring the velocity of the price action. When the histogram makes new highs compared to the previous wave it only means that price has accelerated. When I see a new high in MACD-H then you might consider shorting the stock and of course the reverse method could be applied. Over-all, in all my years of trading I have never found MACD to be a reliable indicator. To many false signals...
I have studied TA thoroughly. Most serious traders did at some point. Most serious institutional studies have found TA useless You as well as others are 'believers" in TA. You pump it, promote it, and yet you never did a serious major longterm study of your own on the majors indicators,. Once you do and realize that, you stop using it. 90% of the people here DID use TA. What do you think most traders base on, if not TA ??????
stop thinking of it as in "indicator" and think of it as a "study". a study/tool used to measure the past. it does not "indicate" anything, no indicator does. They are all just mathematical "studies". and...given that, i notice that many people and charting apps use the bar close as the input to the study (indicator). why? do you think on say a five minute bar that everyone around the world is staring at their computers, holding their breath until the 5 min bar closes? closes what? closes for business? closes escrow? closes tail? Just like there is no such thing as an indicator, there is no such thing as a Close, or Open of a bar. Trades (transactions) move fluidly through the electronic trading markets. There is no concept of open/close on an any bar in any time frame or tick frame, its just a marker in your charting application that you believe poses some value. it does nothing of the sort.
actually, I base my trading on the close of the previous bar. So 30 seconds before the close, I wait anxiously to see if it closes at the price where it will trigger a trade that is likely succesfull. If I do this, others must do it too.
And what would a moron that studied Hershey's SCT for 5 years and sucking up to Spydertrader without working out it was rubbish know about price action?
Okay, I am a noob, but from all the information I have come across [I am chasing my CMT now], I have seen price & volume remain as the true measures of when and where to strike. But the problem with saying that the indicators are wrong, lag, etc. is that MOST OF THE POPULAR INDICATORS ARE DERIVED FROM SOME FORM OF PRICE & VOLUME DATA. So what did you really say? If you are referring to watching the price movements of the different orders being placed, have told these people how they should account for dark pools? Have you mentioned that if overall security volume is down, snap shots of price action would allow other traders to eat their lunch [and dinner too?]. Did you also explain that the speed of which your data provider can get you data can make or break you if all you are watching is price action? Did you explain that if you watching MACD and other similar indicators, you should probably concentrating on swing trading in the first place? No. So if you're not going to take the time to answer the questions appropriately, don't suck people in with recommendations that will get them in more trouble than it is worth. Bottomline is Half truths will get you killed - literally. If you study the bible enough [I mean even if you're not religious, it is still a good read], you'll notice that the Lucifer [the devil] generally uses half truths and twisting of facts or statements to draw people in. Baiting many might call it. And to answer the original question: both. Most traders on this forum should be using [in order] Market Volume, Security Volume, RSI, MACD, Stoch, [or something similar] along with some basic fundmentals [P/E, Tobin's Q] to ISOLATE their traders and to set targets exit points. From that point when you RSI & Volume are about to pass strike zones [for RSI or like indicator, just after a cross], that is when you watch Price Action like a hawk and nothing else -- Really. Close your chart. You have enough data to be in the right security, you just looking to exploit the best entry you can without getting a false move. And you keep going until maybe you get good enough to trade off price action alone. But then you should be hedging with calls and puts anyways to allow your swings to unwind so you won't be in too much of a hurry. I know that this might be for the lower end trader, but it IS what works and it gives you the opportunity to learn a sector profitably while trading a live account Real pros can do this buy looking at price action alone all day. But then, Larry Bird could hit over 100 free throws in a row -- several weeks in a row. Most people at the pro level couldn't even do that. The same can be said for Price Action. My $0.02