School of Pipsology - Middle School
Topic - How to Use Oscillators to Warn You of the End of a Trend
The course says that:
You would’ve had another loss around the middle of May if you acted on those buy signals from the Stochastic and RSI and simply ignored the sell signal from the Parabolic SAR.
how is this possible ? if i had bought at the the RSI or Stochastic i would have won, why it says that the SAR was the correct signal?
As all TAs lag it’s important to tweak a balance. The above chart is using the standard settings which are no more than okay at best, especially PSAR.
I use both PSAR & RSI on my trend strategy.
However PSAR is set at 0.09, 0.40. This gives smaller lag. And the RSI 10 setting has only one 50 line. Above is buy momentum and below is sell.
I also use MACD set at 3.10.16. tested over 100 times period against the standard settings, which provides a better entry point, and completes the threesome set.
Bear in mind all are lagging indicators, but with those settings it’s a lag of no more than a candle on 1 minute chart. The MACD histogram is especially as accurate as you could wish for on each candle movement. In my view, the best TA momentom indicator.
Best of luck.
