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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study! -- Ignore unavailable to you. Want to Upgrade?

To: jebj who wrote (10660)	5/8/1999 10:56:00 PM
From: David Wright	Read Replies (2) \| Respond to of 14162

jebj, MACD is not an oscilator, so I would not replace RSI with it. Instead, I use stochastics, which is an oscilator. RSI is typically thought of as a "following indicator", since it uses averages of highs and lows over a period in it's calculation. Stochastics uses the current period's closing price (actually the current price when you have a data feed), versus the periods highs and lows, and so is viewed as more predictive. MACD is a trend indicator, like moving averages and Bollinger Bands, and for trading purposes, will always get you in too late if you use the signal line for entry and exit. Instead, I use its slope to confirm what I see happening with Stochastics. It helps to weed out the false signals stochastics gives you. When I said tick by tick, I meant updating the graph's underlying calculations with each tick representing the closing price for the period. It gives you a lot of false signals that way as a price is turning in direction, but once a trend sets in it really helps to trade. I do agree with all of your observations about trading options. I have found them to be annoyingly sluggish, and rather illiquid. Both death to a trader.