MACD + histograms/Twiggs/ROC
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     rusty99
Member
Username: rusty99
Post Number: 4
Registered: 10-2006Rating: N/A
Votes: 0
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| | Tuesday, January 06, 2009 - 06:00 am: |  
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I am a relative newcomer and I have been using a system which uses MACD crossovers + price/volume changes to search for stock. I then use a chart that includes MACD + histogram and Twiggs + ROC to choose when to buy and sell. The signals are a simultaneous rise in Twiggs and ROC + a change in histogram
trend (or MACD crossover) for Buy Signal and simultaneous Falls + change in histogram trend for the sell signal. (See chart) I would be interested in any comments you may have on this system. The MACD crossover is generally too late as a signal - hence the use of the histogram trend.
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tryhay
Member
Username: tryhay
Post Number: 1251
Registered: 09-2005
Rating: N/A
Votes: 0
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| | Wednesday, January 07, 2009 - 08:29 am: |
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Hi rusty,
rusty99 wrote on Tuesday, January 06, 2009 - 07:00 am:I would be interested in any comments you may have on this system.
The only comment I have is I don't routinely use TMF & never use an ROC indicator ~ MACD is real powerful: whether you use the histogram, signal line & divergence. Occaisionally I'll use TMF if I want a heads up on stock direction... FWIW the difficulty in using indicators in the current bear market, rather than the last 5 yr bull market is most patterns tend to fail rather than perform as one might expect (be used to) ~ for example with the price action below the 50D MA the MA provides reletively strong resistance no matter what the pattern suggests.....
I do have charts set up with say three indicators that may include the same indicator with both the daily and weekly indicators (so I can see the short and longer term movements)....
It is a while since I have checked out Colin's site re use of multiple indicators, but this short article shows clearly how one might use multiple indicators on the one chart: <http://stockcharts.com/school/doku.php?id=chart_school:trading_strategies:multic ollinearity> making sure that the indicators chosen are actually measuring different attributes: Momentum, Trend, Volume
Happy trading DYOR
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rusty99
Member
Username: rusty99
Post Number: 4
Registered: 10-2006Rating: N/A
Votes: 0
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| | Thursday, January 08, 2009 - 06:17 am: |
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Thanks for your comments Tryhay
Multicollinearity is reduced with this system as
ROC(price) is a momentum indicator
MACD is a trend indicator
Twiggs Money Flow is a Volume Indicator
The system is not mechanical but requires interpretation using the top display.
I use a filter (MACD + Volume and Price changes) to select potential stocks and then use the display to narrow down the choice and further information to buy and sell. It is a short-term system (5 to 10 days or more).
Cheers
Rusty
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