Dear Brother ELASBANI
the experts are saying
1-for day-trading and short-term trading is to buy dips and sell rallies
and also
2-Two components are needed to make this strategy work
First : you have to be trading in the direction that
gives you the best chance of success
Second: you have to be able to identify potential support
or resistance for that trading day
***The first step is to determine which way the market
is likely to go today -- in other words, is the trend
up, down or sideways
*** One method to determine the market trend involves
a couple of old standby technical indicators
the Moving Average Convergence Divergence MACD
and the stochastic indicators. These oldies but
goodies really can be useful if used in the proper
combination
Look at both the MACD and the Slow Stochastic
on a daily chart to determine in which direction
you want to trade the next day
For the MACD, use a little longer time value for
your inputs then the standard -- say, around a 10-30-10
exponential moving average combination
also use a slow stochastic indicator with an
input value of somewhere around 20 days
Both of these indicators should be displayed together
under the price data. Look for situations when both
the MACD indicator and the stochastic indicator are
on the same side of the signal line
If both are above their respective signal lines
then trade the buy side. If both are below their
respective signal lines, trade the sell side
Quite often you'll find the MACD and the stochastic
indicators are on opposite sides of their respective
signal lines. In these instances, avoid the market
Once you've determined the direction to trade
the next step is to find support if you want to buy
or resistance if you want to sell. There are several
ways to do this
*** one of the methodologys that I have read is
3x5ATR " and to construct it
1. Add up the true ranges for the last five days and divide by five. This is the 5ATR
2. Calculate a three-day simple moving average of the highs and a three-day simple moving average of the lows
3. To calculate the 3x5ATR for potential resistance, add the 5ATR to the three-day moving average of the lows. To calculate the 3x5ATR for support, subtract the 5ATR from the three-day average of the highs
An important point is that this is not a total day-trading strategy. Look to combine other techniques that identify potential support and resistance points. A good rule to live by is to look for a confluence of support or resistance by integrating analysis techniques and integrating time frames
finally , I hope this information add small portion
to your existing knowledge
regards
note : sorry for any typing errors
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