Subject: RSI & Fib. Indicators
To: "rocky" Date: Thursday, 19 March, 2009, 12:38 PM
Dear Mr Rocky,
Thank you very much for your concern towards my position and FYI, I closed at @858. I have another 3 questions and hope you don't mind.
a) Whenever a doji sign appear either on top or bottom on a daily chart, does it mean the market trend is going to turn? or is it applicable to interval 1/2/3 that you mentioned earlier !b) RSI indicator - what time frame & parameter are you using ? Do you use default setting ?
c) when you apply fibonacci indicator, what timeframe is the best fit ?
Honestly following you now, I can see $$$$$ in my pocket. You are really22 great, Rocky.
Where would be your next entry, long or short ? Please kindly advice.
Thanks & Regards,
Mr XXXX
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-- On Thu, 19/3/09, Rocky R wrote:
From: Rocky R rockyyyrocky@yahoo.com.sg
Subject: Re: RSI & Fib. Indicators
To: "Mr XXXX" xxxx9657@yahoo.com
Date: Thursday, 19 March, 2009, 3:19 PM
Hi XXXX,
Glad you made $$. My entry / exit will ALWAYS be informed in BT chatbox.
#1) DOJI There are four types of doji candlesticks -- common, long-legged, dragonfly and gravestone. All dojis are marked by the fact that prices open and close at the same level. If prices finish very close to the same level (so that no body or a very small real body is visible), then that candle can also be read as a doji.
What I call a "common" doji has a relatively small trading range, and it reflects indecision on the market of market participants.
How It Works:When assessing a doji candlestick, always take careful notice of when it occurs. If the security you're examining is still in the early stages of an uptrend or downtrend, then it is unlikely that the doji will mark a top. Similarly, if the doji occurs in the middle of a Bollinger band, then it is likely to signify a pause rather than an outright trend reversal. As significant as the pattern is, one should not trade on the doji alone. Always wait for the next candlestick to confirm your suspicions before taking action. That does not necessarily mean, however, that you need to wait the entire next period. If a doji is seen after a sustained uptrend, then a large gap down immediately following the doji should normally provide a safe shorting opportunity. The best entry time for a short trade would be early in the following session. Similarly, if a strong downdraft occurs at the beginning of a week after a weekly doji, trading action should be taken.
Glad you made $$. My entry / exit will ALWAYS be informed in BT chatbox.
#1) DOJI There are four types of doji candlesticks -- common, long-legged, dragonfly and gravestone. All dojis are marked by the fact that prices open and close at the same level. If prices finish very close to the same level (so that no body or a very small real body is visible), then that candle can also be read as a doji.
What I call a "common" doji has a relatively small trading range, and it reflects indecision on the market of market participants.
How It Works:When assessing a doji candlestick, always take careful notice of when it occurs. If the security you're examining is still in the early stages of an uptrend or downtrend, then it is unlikely that the doji will mark a top. Similarly, if the doji occurs in the middle of a Bollinger band, then it is likely to signify a pause rather than an outright trend reversal. As significant as the pattern is, one should not trade on the doji alone. Always wait for the next candlestick to confirm your suspicions before taking action. That does not necessarily mean, however, that you need to wait the entire next period. If a doji is seen after a sustained uptrend, then a large gap down immediately following the doji should normally provide a safe shorting opportunity. The best entry time for a short trade would be early in the following session. Similarly, if a strong downdraft occurs at the beginning of a week after a weekly doji, trading action should be taken.
#2) RSI Wilder originally used a 14-day period, but 7 and 9 days are commonly used to trade the short cycle and 21 or 25 days for the intermediate cycle.It is also formulated to fluctuate between 0 and 100, enabling fixed Overbought and Oversold levels.Trading Signals
Different signals are used in trending and ranging markets. The most important signals are taken from overbought and oversold levels, divergences and failure swings.
Use trailing buy- and sell-stops to time entry into trades.
Ranging Markets
Set the Overbought level at 70 and Oversold at 30.
~ Go long when RSI falls below the 30 level and rises back above it; or on a bullish divergence where the first trough is below 30..
~ Go short when RSI rises above the 70 level and falls back below it or on a bearish divergence where the first peak is above 70.
Failure swings strengthen other signals.
Trending Markets
Only take signals in the direction of the trend.
~ Go long, in an up-trend, when RSI falls below 40 and rises back above it.
~ Go short, in a down-trend, when RSI rises above 60 and falls back below it.
Exit using a trend indicator.
Take profits on divergence. Unless confirmed by a trend indicator, Relative Strength Index divergences are not strong enough signals to trade in a trending market
#3) FiboMost use Daily chart to set up Fibo in this way >> find out up / down trend, highest & lowest swing. Myself also use 60mins Chart to set fibo, I believe XXXX saw it b4, u notice what's the different?? Check it out and tell me.
Regards,
Rocky
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