On the weekly chart MACD is descending, stochastics are descending, and I think the trend is down.
On the daily chart MACD is descending but stochastics are entering oversold and I think there is what looks like a 12345 ellliot wave forming with possible support at 1.0500
My question is do you follow the elliot wave and buy, or follow the weekly trend and sell?
Follow your trading plan.
Right now I’m just trying to learn so that I can develop a trading plan. I pointed out the contradicting indicators and would appreciate a real response with useful ideas on how to handle situations like this.
Mark: Indicators usually contradict each other. Your best options are to use one indicator or no indicators. Pardon me if my first response seemed flippant.
Thank you for your response
If things don’t line up, and there are conflicting signals, I go look for an opportunity with another pair.
Don’t try to force things, patience is key.
The general idea I have observed from research is that the larger time frame chart signals supersede lower time frame signals.
Consider this: in the time it takes the daily chart to go from overbought to the zero line, the daily chart will have probably gone from overbought to oversold and back a few times (at least it typically does that on the 60 minute chart when compared to the 15 minute chart, 1 4-1 time comparison)
The signals you follow will ultimately be dictated by your trading personality (are you going to sit idle outside of the ups and downs and watch your investment for the weeks it takes to run its course on a weekly chart? I couldn’t). That said, if your using weekly charts for trends and hourly chart to trade, if the weekly says you are in a down trend, you want to trade a clear SELL signal on the daily chart. As it was said before, if your signals do not align across your different timeframes, look to a different pair.
Hope this helps a bit.
Good explanations thank you