[BlueHorseshoe]

Originally Posted by ScoopyJ »

Cool stuff, thanks! I'm interested in intraday trading but im actually still in high school right now so thats out of the question for a while
What settings would you suggest for swing trades with a range of about 2-6 days, so that i wont be on "a lot less steady ground" ??

You're much better off starting out with swing trading in my opinion.

The settings that I've suggested above are an ideal non-optimised solution for most instruments where this strategy will work. If anything, I would consider optimising the length of the SMA used for trend filtering before I would consider optimising the RSI settings.

What are you trading - individual stocks, futures, forex?

This type of strategy will work best in markets that show less inclination to trend and more tendency to trade back in the direction from which they've just come - the S&P500 (and instruments that track it such as the @ES futures contract or the SPY ('Spider') Exchange Traded Fund) are probably the best examples of this.

You might also like to look at the British Pound, Gold, or other indices such as the FTSE, DAX, or Nikkei.

[ratmpower]

When I tested my strategy with RSI, what I found was that its performance varies with what stocks you are trading. On one stock, RSI with particular value seemed to work well, and on another, the same strategy actually backfired. You may want to test your strategy with Virtual stock trading site like http://www.strategyard.com/ before you invest in the actual market. I also suggest you pick a few companies, learn their chart patterns, volatility and execute your strategy only on them.

[roztom]

Stochastics is just another oscillator and has it's place if you know how to read it...but it should not be used as a simple cross-over.

I suggest the CCI as was mentioned earlier.. In addition, Stoch can get you into a countertrend trade and can be very ugly if you are trying to position.or swing trade...with the trend..

I do use it just to keep an eye on cycles/rotations but not to trigger any trades..

If you are just starting out the best way to go is get an online simulater account... this will allow you to experiment and save your $ for education and not donate it to the traders retirement fund.. Also pick something that has volatility like an ETF or just a stock and get to know it... Once you learn technical analysis you can trade anything..it is almost all the same, notwithstanding volatility of some markets, thinness of volume but that is not your concern as a newbie...

Good luck...this is the best and also toughest business..

Regards,

Tom

Good luck..

[Handlowiec]

I have written code and back-tested RSI, MACD for all kinds of cross overs, RSI crossing 50, MACD crossing zero, and more. (Using AMIBroker) Then back-test this on thousands of stocks. If someone can really make money using these indicators alone I would sure like to see it.

If you have a strategy I would be willing to back-test it and post the results from AMIBroker.

Here is RSI(14) Crossing 50 and the results for all stocks under NYSE for the past 10 years. 15% Avg a year, 400% Return. Sounds good, well then look at the other stats 39% Winners, MAX Draw Down $94,000. See the attached report image.

xBuy = Cross(RSI(14),50);
xSell = Cross(50,RSI(14));


PlotBuy = ExRem(xBuy ,xSell);
PlotSell = ExRem(xSell ,xBuy );

Buy =PlotBuy ;
Sell = PlotSell ;

Short = PlotSell ;
Cover = PlotBuy ;

PlotShapes(shapeUpArrow * Buy, colorGreen, 0, Low );
PlotShapes(shapeDownArrow * Sell, colorRed, 0, High );

Test Results




Signals DIA