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Strategies & Market Trends : Technical Analysis - Beginners -- Ignore unavailable to you. Want to Upgrade?

To: Chris G. who wrote (7366)	12/30/1997 3:13:00 PM
From: David R. Evans	Read Replies (5) \| Respond to of 12039

Hello Chris, I've been away for a while but I'd like to give this a try. If you're looking to create a new system why not start from the beginning? Put up a chart of IBM and see what I mean. Make sure you have at least 2 years of data in front of you and look at nothing but price. I'm using MSWIN for my test but I'll make sur that I stay with common indicators so any charting software can be used. Now throw up a 5 day EMA on price and make it red. Throw a 13 day EMA in Blue and then a 40 day EMA in Green. Now notice that every time price takes off you see the Red cross above the Blue and the Blue cross above the Green. It's at that point of explosion that we want to buy..... Just for kicks, put up a 200 day EMA in Yellow and notice that every time price crosses up through it you have a raise in price.. If you just wanted to use the EMA crosses you already have multiple entries and exits. You could use the 5 cross of the 13 OR you could wait for the 40 to kick in for confirmation. Now start throwing up some of your favorite indicators and see what they were saying at your desired buy and sell points. Try my favorite StochRSI (14) and see if it fits the bill for you. Did it get you in at the right time or were you a few days late? How about it's exits?? Another great indicator is On Balance Volume (OBV) with a 40 day SMA on it. Did OBV and it's SMA cross at the explosion point? In most cases they do. Of course before you decide on a system you must know your time frame. If you are looking longer term I would STRONGLY suggest Dahl's Primary Trend as your lead indicator. If you are shorter term I suggest StochRSI (14). Here's another way to blend a few: Use StochRSI (14) as your primary signal (StochRSI (14) cross UP THROUGH 30) but also have the following indicator windows up on the screen. Dahl, Dave's New System (DNS), Insync Index, and StochRSI (8,5). Before you buy make sure that ALL the above mentioned indicators are MOVING UP with Insync above 50. Dahl and DNS DO NOT have to be long, just moving in the right direction. StochRSI (8,5) must be above 30 and still moving UP. Now you need to put up two MACD's. The first MACD is 8-17-9 and it must be LONG ( above 0) for a buy. In fact, I like it when MACD (8-17-9) has just broken through 0 which gives me a buy from MACD (8-17-9) and StochRSI (14) on the same day.. The second MACD is 13-34-89 and it does not have to be long, just moving in the right direction. As you can see from the above, I like to mix both shorter term and longer term indicators when creating a system. Once a stock has survived my MSWIN screens I take it over to GET and look at CCI and Optimized Parabolic SAR as well as Wave counts and Fib and Gann... Well, I guess that's it for now.. I hope this helps.. Dave Evans