What other indicators do you use for scalping or range trading?

Hi all,
I am a pretty new trader that recently opened up my first live account, and everything was going fantastic for me for about two weeks before I broke a newb rule, and didnt incorporate a stop loss into one of my trades and nearly had my entire account wiped out.

The system that i was using was very simple (only used RSI and stoch as a means to guage when market shifts occured, as well as bollinger bands) and I would scalp during clear range bound times on a 15 min chart.

There were a few things i learned through this,

first the 15 min chart was a little short and did produce a lot of fake outs for me(especially when exiting trades, I was almost always out of a trade before half of the movement occured).

Its obvious (as i have read before) that you cannot simply use the RSI and Stoch indicators alone to determine when a change will take place.

Now, my question for fellow range traders would be what other technical indicators do you use to determine directional changes within the range?? What chart time frames have you found to do best for range trading??

Thanks in advance for any help.

To help in range trading, I use the Awesome Oscillator in conjunction with the MACD. Learning to read these two indicators can be a big help in your trading. Plus, the Parabolic Sar can be useful as well. A little slow in showing but, a good backup to KEEP you in a trade.

These are good but, to be truthful, nothing beats a good reading on price action, where it’s been and possibly going (higher MA’s show this, 120, 200, or 300). Of course you can’t predict but, previous daily price ranges can be a good thing to watch closely. Any tunnels forming? And of course, make sure there are no news reports coming, obviously. That can upset the whole thing.

As far as what chart time to use? Well, here again, the price itself will tell you that. Is it ranging better in the 15M, 1H, 4H? Just have to keep a watch on it and see.

I have tried all these indicators with all sorts of combinations and have not found them useful. I have Gerald Appel’s book “Technical Analysis” in which he fully outlines everything about the MACD which he invented.

I am beginning to agree with Rhodytrader (master contributor) that indicators basically do not work. They are correct at best only about 50% of the time.

Bazooko - POST - “lets do an experiment” is trying out trading using the toss of a coin. Interesting.
Again, money management is the answer.

I have found candlestick charting coupled with Bolinger bands to be far superior and also much quicker. I do not want to be stuck in front of a computer all day.

Be inspired by the following hyperlink :
Candle Sheds More Light Than The MACD

Regards, Tymen Wortel, Perth, Western Australia.

I like the PSAR a lot. I’m still practicing though.

I’m a newbie myself and I have found scalping to be very very dangerous. I’ve been advised by a friend who has been doing it successfully to do scalping when the market is ranging slowly. I need to ask her what indicators she is using.

I had had very minimal success scalping with Awesome Oscillator and EMA 3 and 21. It is supposed to work but I guess I’m too impatient.

Hey, Thanks for the input guys, I also have been finding that bollinger bands to be very helpful recently, especially with the GBP/JPY pair, but only when there is a smaller range between the upper and lower bollinger bands, say between 30 and 40 points, it definitely helps show that there is a range/tunnel forming.

I have not had much use with the awesome oscillator, what is this analysis based off?? What are the signals generated with it?? In case that is vague, i am asking what is used to determine the values for the osciallator, and also at what point does the osciallator show a signal…like 70 and 30 for RSI.

Thanks again for the input. Good luck to all. :slight_smile:

dont u find MACD + stoch + RSI useful? sometimes can fake you out, but i make sure theres some parabs and trade only when further assurance is provided. its been quite reliable so far.

i want to trade as often as i can so i use like 1 min charts to make quick profits, sporadically, and try my absolute best to not break the rule.

it says i should use only 3. 1 min 15min 30min…how do i know if in the 4 hour charts, resistance has been touched…and looking at the 30 min time frame wouldn’t actually give me the whole picture ? or is the 30 min time frame long enough to provide a relative big picture compared to my 1 min frame?

I dont beleive that I understand enough about the MACD to use it as an indicator, from what i have seen, it seems to be pretty lagging…but i have been reading up on it and i see how it could be useful, i just havent got the feeling i understand it enough to trade using it.

Can anyone help explain this indicator out a little better and how they use it to indicate entries??

wouldn’t MACD be actually leading? cuz everytime it crosses, the trend changes, but sometimes it will look like its going to cross just to diverge wide, so im using this for heads up, and confirm with other indicators and parabs, and looking at the big picture.

So many questions in this post, lets start at the last one first. The Macd is a laging indicator. There is no real such thing as a leading indicator becaust that would be predicting the future.
Wackio if you are trading on the mt4 platform then goto the help pull down window and type in macd, all your questions will be answered. If that is of no help then goto youtube.com and you will eventually find your answer. If the macd is too lagging for you then just change the peramenters to fit your system.
Stock+RSI are really telling you the same thing, just in a different format.

So many question on this post. Lets start with the last one first.
The macd is a lagging indicator there really is no such thing as a leading indicator because that would be predicting the future.
Wackio if you have the mt4 platform then just goto the help pull down menu and type in macd and you will have all you need. If that is not enough then goto youtube.com and type in macd.
Stoch+RSI is telling you the same thing. The only difference is one is better for short term and the other is better for long term. Sorry I forgot which is which. If you trade on the 1min chart you will get alot of fake outs. I suggest using the gann grid for scalping. Also you need a good network for this, I suggest paltalk.com goto the forex room and you will get alot of help there.
Tymen1 thanks for the love I was beging to belive that no one was reading that post. But you have to be careful with rhodytrade’s advise. He maybe right that indicators only work 50% of the time but I bet you can also find somebody that says they are right 90% of the time. It is just a matter of how you trade. I agree with you that candlestick are vary useful.
I think that covers just about everyone here. Now for what was missed. I have found out in books and my own trading that fibos, trend lines and support and resistance are vary useful tools. I am still on the fence about elliot waves.

i use …

–elliot wave+RSI+Bollinger Band=insyaallah i can gain profit–

–stop trading when it goes upside down :confused:

–never put stop loss,just put limit profit :smiley:

–this is what i have done after i loss a lot of money and nearly gave up–

                                    :rolleyes:

You are right! Indicators are met to deceive and mislead the market!

I am new to this forum but not new to trading. I no longer use indicators to trade enter or exit trade. At best I use them to prove my system wrong or right.

I trade with pivot points combine with my chaos theory strategy to enter and exit…currently doing +75%, improving on it for 85%-100%! Work for all currencies, stocks, and even better on oil, gold, silver if you have money to trade those.

To Wackico :

I have the book : “Technical Analysis - Power Tools for Active Investors” written by Gerald Appel, the inventor of the MACD.
He fully derives and details all about the MACD in this book. There is a lot there that most traders using the MACD would simply not know.

I have studied this book very carefully and used the below information extensively in trading the share market.

However, after reading an article by Chris Tate, an Australian master share trader, I have come to the conclusion that candlesticks are far and away superior. In this article, Chris states that the very best indicators (meaning the MACD), are correct only about 50% of the time.

The MACD is both a leading and lagging indicator.

Leading in the use of divergences with the MACD histogram and lagging in that it uses moving averages.

A 50 period simple moving average should be used to determine the direction of your market trend. The MACD neither gains nor loses much when trading against prevailing trends so loses can be well contained even if price trends are unfavourable.

[U]The MACD operates with certain supplementary rules :[/U]

Buy signals are more reliable when the MACD has crossed from above to below zero at some time since the most recent sell signal. The MACD does not have to be below 0 at the time of the buy signal, but it should have been below 0 at some time since the start of the recent decline.

The exact inverse is true for below to above zero.

These rules can be shaded a little for extremely strong market trends.

[U]Different combinations of MACD are used for buying and selling :[/U]

When market trends are very positive - buy very fast + sell very slow. That is : 6-19,9 for buying, 19-39,9 for selling.

When market trends are neutral to slow - buy fast + sell slow. That is : 12-26,9 for buying, 19-39,9 for selling.

When market trends are negative, buy fast + sell fast. That is : 12-26,9 for both buying and selling.

Be inspired by the following link :
Candle Sheds More Light Than The MACD

There is more, but this is a start.

Finally, thank you Fxbroker for confirming my suspicions about indicators.

Kind regards, Tymen Wortel, Perth, Western Australia.

Thanks for the explanations guys, and tymen, I will definitely check out that article.

Im a newbie so what i say isnt worth much but i would say slow stochastic, rsi and commodity channel index is what i use and using these 3 i can tell when price is about to change, thanks to these great guys who could invent such indicators that kind of predict the future. im about 85% right at least, with scalping i thought you are meant to use the 1min chart but obviously theres no correct way to do anything if it works it works. economic news can mess scalping up so be aware of what news is coming out when, if you want to chat to me about scalping that would be great, seems we are in the same boat, cheers

There are a number of oscillators that you can use. Williams Percent R, Stoch etc. Remember price action is key. It is what all traders cannot avoid looking at and what they are looking at. Wait for a nice supportive candle formation followed by confirmation to enter at the top or bottom of your range. I use an oscillator as additional confirmation, but not solely as an entry indication, if all in sync, I think “ye this trade has high probability”. My opinion: Forget about 15 min chart, jump up to a h4 or a daily…

EDIT: haha only seen the date this was created. Holy resurrection Batman!