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Hi Troopers.

I have received enough emails to warrant answering the questions posted on line rather than individually by email

So I will paste the questions and refer to them in my answers. As I was heading out and not sure what time tonight I shall return, I hope this answers all your questions.

The questions:

1. Why use the MACD histogram rather than the MACD itself?

2. What is the significance of using RSI?

3. How do you plot the VWAP?

4. How accurate is this setup and can you use more or less indicators?

5. Do you use Fib numbers?

6. What are the up/down arrows on the main chart?

7. How do you know when to buy and sell?

OK! Here goes. I’ll refer to the answers individually.

1. Why use the MACD histogram rather than the MACD itself?

Using the MACD alone is fine, however the timing may be a little off for gauging entries and exits. The Histogram allows some smoothing to be incorporated and visually more effective when chasing the bars.

If you refer to the Chart on the ADY thread and look at the MACD histogram then relate it to the price on the main chart you will be able to note that some entries would have been best served using the bars rather than the signal line.

2. What is the significance of using RSI?

The RSI on the intraday is an excellent gauge I use for trend change. It is important to note NO single indicator is used solely to identify patterns and all indicators should be used in combo. When the RSI is trending below the 30 line, the stock is oversold, the timing is crucial! the stock could continue to be oversold so that does not identify an entry until such a time that it trends to the 50 line and above.

I use the RSI to place the bid, knowing it is below 30 is when I place the bid at the level the stock is selling for in hope that I am not the last in the queue! If I happen to remain last, the bid is then moved lower! When the price steps upwards and the RSI moves above the 50 line and heads to the 70 line it is then overbought! This is where the sell bid gets entered into.

3. How do you plot the VWAP?

The VWAP is another indicator that may be plotted on the main chart. It is mainly used as a sentiment driver for the day. A declining VWAP indicates a lower close, while an increasing VWAP indicates a higher close.

4. How accurate is this setup and can you use more or less indicators?

Interesting question! The short answer is it’s accurate enough to make money on the market Nothing is for certain, so looking at the combination of all indicators plotted is what it’s all about.

Some indicators will give a false signal, so how do you know that? You need to look at other indicators that will relate more relevantly to the scenario for that time slot! which is most accurate? you don’t know which, it is the combination of all that is relevant. Using more or less indicators only confuses the visual outlook, I tend to use what is more relevant and volatile

5. Do you use Fib numbers?

At times I plot the Fib numbers on the chart, yes. However I do not rely on the Fib numbers alone as I do not like cramming the chart. The Fib numbers are excellent to use for searching for support/resistance.

While these will not be available early in the day, once the highs and lows are found then you could use the Fib numbers to locate the medium for support.resistance.

6. What are the up/down arrows on the main chart?

The up/down arrows are plotted using the Parabolic SARs. These are signals where you could buy/sell the stock! Important to note that I do not follow these arrows to the letter and will confirm using the MACD histogram which is normally triggered before the arrows are plotted

7. How do you know when to buy and sell?

I don’t!!! I follow the combination of all indicators and not arrows or a single indicator. This is not easy to learn however the best way to get used to reading the intraday chart is to plot a volatile stock for the day and look at the price relevant to the behaviour of those indicators discussed.

There is no sure thing and I urge anyone contemplating this to watch and learn for at least a couple of weeks before attempting this will real money, this is the best I can suggest. I do not encourage anyone to simply go out and do this without first understanding the specifics of these indicators! this is crucial, and so is watching for a couple of weeks

Cheers and enjoy your Sunday everyone



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