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Strategies & Market Trends : Underexposed Technical Analysis
AQN 5.7710.0%Dec 9 3:59 PM EST
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To: Claude M who wrote (451)8/28/2019 4:32:02 PM
From: Underexposed1 Recommendation

Recommended By
kimberley

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DIS: HI Claude.... Very good questions... I will answer them with examples


I have a question: is the "0" line on the MACD of importance ?


I don't treat the MACD in a traditional sense in my normal TA .... all I use this indicator for is the trend of the MACD itself without the signal line and look at that trend with respect to the Slow Stochastics and BBwidth.

Here is an example of why I do this.



I have highlighted the MACD line in light blue for clarity. The orange lines are major decision points if you slavishly follow the MACD as it crosses the zero line. The Blue are the decision points if you use my TA.

Every time the MACD touches zero you are faced with a Buy or Sell decision. I count about 5 times that this occurs in this chart. Starting at the left (orange)

1. There is a sharp MACD fall when it hits the zero line.... Certainly doesn't look like a buy but you would have missed that buy when it rebounded...(how could you trust it not to fall again??)

2. The second line identified the crossing as a sell...but you cannot sell immediately there since it may rebound...if you wait too long you lose more money.

3. The next one looks like a buy... but the MACD heads for zero a few times until the last one which is clearly a sell....and you had better react quickly.

My TA on this chart is different.


My rules for a Buy or Sell

If the BBwidth is at a low point and ....

If the Slo Sto is rapidly rising and near 80 with the MACD having a positive slope - BUY

If the Slo Sto is rapidly falling and below80 with the MACD having a negative slope - SELL


Now using these rules there are only 3 that are clear decisions that don't require a confirmation... Though not as strong for the first Buy it could have been made on April 8 as the Slo Sto is just reaching 80 and the BBWidth is rising... that is a possibility then the place where I marked BUY would be a confirmation.

The second 2 indications are definite SELL signs by my rules.... I would be suspicious that there would be a sell coming as shown in the little circles since the Slow Sto had fallen steadily below 80 a few days before.

If I were scalping a quick profit (which I rarely do) I am toying with the idea of selling after the maximum of the BBWidth after a Buy signal..... (April 23). I don't do that yet... but I think about it a lot. what worries me is missing out on further gains.

Warning... make sure you use the parameters for each indicator that I use...otherwise you may not see the same patterns.

And is a BUY possible < 20 on SlowSto ? According to your system ?
No, and this chart shows you the reason why this is not a great idea



At what point do you decide to buy into this stock??? ... it continued to fall for 3 solid months... and even though the Slo Sto has risen above 20 now..... Has the bleeding stopped yet???.... that is not clear yet

Also, if I'm right, at the beginning of a bull or bear the BB should move up !
Yes...sort of.

The reason why I call this my "TRIGGER" chart as this is my main decision chart for market timing... the 3 other charts are to sort out whether a current situation is Bullish or Bearish...but not necessarily a buy or sell... (deciding if I should Hold or Sell if I own the stock... or if I should keep a stock on my watchlist if I am considering buying)

In either case, a definitive Buy or Sell signal occurs when the BBwidth suddenly rises (usually after falling to a low point in its trend...but not always)

The BBWidth is the trigger for immediate action. Whether it is a Buy or sell action is determined by the Slow Sto and MACD as I have previously described.

Very good questions Claude.... I hope I answered them clear enough

UE
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