Stochastics and MACD Histogram for daytrading?

Discussion in 'Technical Analysis' started by pstallone, Feb 8, 2009.

  1. Hello Group:

    My primary interest is daytrading, currently looking at fade the gap, upon opening. But also quick entry and exit during the day

    Unfortunately during the day I have been faked out with alarming consistency when following support lines on my stochastic charts(below 20%), support seems to show undersold, the Histogram then confirms mometum. Stochastics Chart seems to cross back over the 20% line. Yet stock seems to fizzle out and return back to undersold levels.

    Very sketchy. I have entered a few trades lately only have my position to fall back, and hit my 1% stop.

    Anyone have any recommendations?

    Also, don't laugh maybe a different question, I know this guy on another forum, he has been posting for 2 years, that consistently fades the gap only with picks from Wizetrade. he does very well, his picks run about 75%.

    Wizetrade has many detracteors, is it possibly good for shorting stocks? He gets picks 4% above ATR, high volume picks, each day.

    thx in advance for any input!

  2. YTEurope


    here you go
  3. Wizetrade is worthless.

    Stochs and MACD will give you a lot of false signals. If you can find a way to weed them out, then it might work. But I have never found a way to do that.

    Good luck with your trading.
  4. nkhoi

    nkhoi Moderator

    you can safely delete one of the panel, lots of redundant info there.
  5. Redneck



    You’re using MACD & Stochastics for entry signals

    Assuming you have entry rules (part of your trading plan),

    Do you have a rule to handle choppy markets?

    Do you have a rule for exiting and reversing?

    Do you thoroughly understand what MACD & Stochastic are based on (overbought / oversold / trending are not the correct answers BTW), what they’re really telling you, and their shortcomings?

    Do your journal your trades - if so what are your notes telling you happens after the trade fails, or the gaps don't close

    I can’t comment on wizetrade

    Food for Thought Sir
  6. Tums


    Every tool tells you a little bit about the market.
    The key is to know what the tool is telling you at certain time of the market.
  7. Mr J

    Mr J

    It just sounds like you're placing too much significance in them. I use them for information, but I don't base my trades around them. Most of the time they're simply confirmation that my analysis is decent.
  8. I agree with the post above on indicators in general. Typically stoch, macd, rsi, most oscillators only work well with sideways price action. During trends, you can get killed trying to find a short term top or bottom. They are best used in tandem with an overall macro view of the market, and an understanding of why the market is trading at a certain level. You also need to track overall market breadth to understand where the market is in relation to program trading cycles and fund money flows.
  9. Read through these threads

    Simple Profitable Method threads
  10. I use Fibonacci Retracement on the opening 1/2 hour.
    If it is a significant gap at the open, I place a fib on the previous close and the first candle. You will see that there are many opportunities to fade this. Usually if there are gaps at the open, you will see it try to close the gap.
    In most cases the direction of the gap will have a follow thru in the overall trend direction.

    #10     Feb 10, 2009