What oscillator(s) do you recommend for scalping in day trading?

Discussion in 'Technical Analysis' started by Bearcrazy, Oct 3, 2008.

  1. Bearcrazy


    As title asks..

    I currently day trade and find scalping strategy suites me the best, and would like to know what oscillator(s) would you experienced traders recommend?

    Sometimes I find that by looking at oscillators and trying ot figure out what it is trying to tell me distract me from focusing on price action (Time and Sales), since scalping requires very frequent transactions. However, with practice looking at them, it should not take that long to understand them.

  2. If you use indicators you are going to be very slow and for scalping you need to be fast.

    Why not just price?

  3. just21


    It's not so much an oscillator but a filter you are after. Define the trend with a ma or adx over 30 and trade in that direction.
  4. Let me give you some friendly advice someone gave me. Any oscillator works ok in a sideways market. Is the market sideways? No, it's going to get you killed in a directional market. Plan on spending thousands of hours watching price action to learn if they market is directional or sideways on your give time frame. Now if you want to try osciallators look at someone, like Pro Logic, that has spent a lot of time with them. Good luck.
  5. How do you plan on using the oscillators? Oscillators in and of themselves are useless. You will need something to filter out a lot of the false signals oscillators give. An oscillator called "J_TPO" for metatrader is a good one. A 6 bar CCI can be of some use in certain methodologies.
  6. I'll show a very simple scalping system that a great trader (Anek) once taught me, takes a bit of preparation in the mornings but it's solid and requires no indicators

    Don't give in to oscillators, instead learn how to spot key areas of support and resistance and mark them in your charts. Look at the previous day and notice where price had major rebounding characteristics also known as price action pivots.

    This is not how I trade now but in the past I scalped like this and had no problems at all as long as I followed my rules, funny enough, not an easy thing!

    Plot those support and resistance levels you found.

    Learn how to compute daily pivots and its corresponding S1-S2s, R1-R2s and mark them as well.

    Take the previous day high and low and mark those too.

    Now learn about fib extensions and fib retracements and mark them.

    You could also add the Opening Range (15m, 30m, 60m) your pick, one is enough, and mark the highs and lows of the range.

    In addition, mark the high and the low of afterhours also known as Globex, and mark them as well.

    You should have many horizontal lines in your charts, a dozen or more.

    When there is confluence, 2 or more lines in a particular price point, fade price with a limit order, or if you are already in a trade make it your exit/reversal point. Study this for several weeks and derive your risk reward numbers, make sure it's positive expectancy.

    Use solid money management and discipline techniques and now you got a very good scalping system that works every day.

    Have fun,
  7. Nice post, Daniel :)
  8. Use Fibonacci Retracement and EXTENTIONS on your 2 min chart.
    Apply it to the support and resistance in the first 30-40 min of trading. It will give you an idea of where good enty and exit point will be at. The EXTENTIONS will be you targets.

    See my thread...
  9. I partially agree... Fib retracements and extensions are HUGE! I use MACD and Bollinger bands to assist me in my decisions. (notice, I didn't say I use the indicators to make the decisions for me!).

    I've done some trading videos on my blog. Check it out!

    Chris Dunn

  10. #10     Oct 13, 2008