I don't make predictions, don't believe in them. - Simply "playing the odds" that if a stock or etf is above it's moving average or trend-line etc. there's "a chance" it will stay there awhile longer, - if it doesn't, dump it.
Depends on how you use moving averages. I use MACD to predict the market, in the form of standard divergence. MACD is just simply a couple of moving averages, and the relation between them.
If an indicator has any value of the current bar in it's formula, it is incorporating the 'real action', not just showing history. When a price action trader looks at a double top, a trend line, a wedge, a historical S/R level, etc. etc., he is incorporating history in his analysis. If you look left when you analyze a chart, you are looking at history. Indicators are price action analysis translated into a formula, what it comes down to, is your interpretation of what it is telling you, just like your interpretation of the significance of 3 red bars followed by on green bar.
Last edited by monpere; February 21st, 2012 at 12:25 PM.
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Very glad to see you back and posting again. I love your implementation of the line on close bar type. How do you get the close dots and how do you get your line to change color based on whether it's an up close or down close? Thanks.
I did a quick search and couldn't find any general thread about trading divergence. Existing threads seem to be focused on specific indicators or vendors or hidden divergence, etc. Since you trade divergence, I hope you will start a new thread just to focus on the broad topic of trading divergence, and you can share why you use MACD vs RSI or other indicators but more importantly I think the topic should be on identifying divergence that works vs a failed divergence.
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