Exclusive Trading

Financial In Market How a special combination and setting of proven indicators, can alert you on significant Stock Market tops and bottoms.

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Oriental Trading RSI - Relative Strength Index is a well known and much used momentum indicator. It was invented by J. Welles Wilder Jr., a great technical analyst.

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Financial Forex Forex Software RSI compares the magnitude of a stock or index's recent gains to the magnitude of it's recent losses and that information is turned into a number that ranges from 0 to 100. A single parameter is used, the number of time periods for the calculation. 14 periods is recommended by Wilder.

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Trading Common practical use of RSI in stock market timing is to measure the underlying strength of the market and to determine if it's getting overbought or oversold. Wilder's own recommendation was to use 70 and 30 levels, to indicate an overbought and oversold market, respectively. If RSI rises above 30 it's considered bullish for the stock or index. If the RSI falls below 70, it's a bearish sign.

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Trading Financial System Bullish & Bearish Divergences:

The Forex market is truly a 24 Hour Global Market opens from Monday to Friday. The Forex market starts each trading day from Sydney, Tokyo, London, and finally to New York. Regardless of whether it is in the day or night, there are always market participants actively trading the Forex market. Forex traders can respond very quickly to any currency fluctuations or breaking news immediately unlike the stock and future market. The ECNs (Electronic Communication Networks) in stock and future market are relatively new products derived as an after hours extension to the regular trading hours. Many of these ECNs have ill liquidity and there is no guarantee that a trade will be executed, or at a fair price. Usually, stock or future market traders would have to wait until the real market opens the next morning in order to execute a trade at fair value.

Day Trading Stronger Buy and Sell Signals can also be generated by looking for positive and negative divergences between the RSI and underlying prices. For example, a falling market index whose RSI instead rises from a low point of 10 and back up to above 50. The underlying index will often reverse it's direction soon after such a divergence. Divergences that occur after an overbought or oversold reading, usually gives more reliable signals.

Forex Financial Trading The Centerline Break:

Fortune Make Option Trading A bullish or bearish indication is given with readings above and below the 50 level. A reading above this centerline indicates that average gains are higher than average losses. A reading below 50 indicates that bears are winning the fight. For confirmation of bullish and bearish signals, some traders look for moves above and below 50, respectively.

Science Of Financial Market Below is the author's special indicator combination and settings, for short & medium term stock market timing.

Future Trading Daily Chart:

Financial Sales Services - 200 ema (close price).
- 89 ema (close price).
- RSI set at 25 periods with horizontal lines at 60 and 40.

Commodity Trading Weekly Chart:

Financial Services Trading - Cycle10 plotted with horizontal lines set at 70 and 40. This unique indicator was developed by Walter Bressert.

Online Forex Trading - MACD plotted with Signal Time Periods set at 5.

Financial Portfolio Trade By the use of a 25 period RSI on a daily chart, in combination with Cycle10 and MACD, plotted on a weekly chart, larger tops and bottoms can often be found. This special indicator setup can be a contributing factor for more accurate stock market timing, although no guarantees are given. Examples for 2005 are the significant April and October lows in the OEX, (S&P 100) where the RSI dipped below 40.

Sierra Trading Post RSI Example:

Trading Financial Future http://oextradingresources.com/rsi-april.gif

Forex Trading Software Cycle10:
http://oextradingresources.com/cycle10.gif

Trading Post Later in 2005 and so far in 2006, three RSI moves above 60 all alerted about important OEX peaks, in November, January and March:

Trading System http://oextradingresources.com/rsi-06.gif

Forex Trading System Below is how i use this as an alert system in my own technical analysis.

Fx Trading By using this 25 period RSI, instead of the standard 14 RSI, some whip-saws will be filtered out. When RSI 25 climbs above 60 or falls below 40, odds are greater more significant tops and bottoms are forming, respectively. This part of the system acts as a warning, a trading opportunity shows up on the Long or Short side and more attention is given.

Trading Card Long (Bullish) Entry Parameters:

In Online Trading Weekly MACD must be in bearish mode (closing prices).

Online Commodity Trading When Daily RSI closing readings falls below 40, (for a bullish entry consideration) weekly Cycle10 must be in it's buy zone(below 40) and make a positive reversal on a weekly closing basis, before entry. It's important to seperate between the daily and weekly charts used for each indicator.

Line Trading A less aggressive approach is then to wait for the high of the weekly bar that caused the Cycle10 reversal, to be broken by a few points. Depending on the risk tolerance, a protective stop can be placed a few points below the swing low or below the low of the bar which caused the weekly Cycle10 reversal. When weekly MACD's signal line crosses it's moving average, a bullish trend reversal comfirmation is given.

Forex Currency Trading Taking Profits:

Online Option Trading Deciding when to take profits is often viewed as the most difficult part of trading. I would consider taking profits, when the 38.2%, 50% or the key 61.8% Fibonacci retracement levels (of the previous bearish trend) are reached. It depends on how overbought the market has become, when those Fibonacci retracement levels are touched. Another, usually slower approach, is to simply take profits when MACD turns bearish again (MA crossover).

Online Currency Trading The odds for a successful trade would increase if weekly MACD has just been through a bullish divergence pattern formation first, before entering bullish mode (MA crossover).

Foreign Exchange Trading Other profit taking suggestions are when weekly Cycle10 makes a bearish reversal up in it's sell zone (closing basis). A drawback with this method, is that Cycle10 doesn't always reach it's sell zone, before making a bearish reversal.

Trading Software Another good point to take profits, is those times when the key 61.8% Fibonacci price level is reached and Cycle10 at the same time is in it's sell zone. In this case a bearish Cycle10 reversal is not waited for. Any market wants to reach it's key 61.8% Fibonacci zone, 60-70% of the time, before making a new trend reversal.

Trading Space Short (Bearish) Entry Parameters:

Oriental Trading Company Weekly MACD must be in bullish mode (closing prices).

Day Trading Online When daily RSI rises above 60, weekly Cycle10 must be in it's sell zone (above 70) and make a bearish reversal on a weekly closing basis, before entry. Again, a less aggressive entry, is then to wait for the low of the bar which caused the Cycle10 reversal, to be broken by a few points.

Forex Currency Trading System A protective stop can be placed a few points above the swing high or the high of the weekly Cycle10 reversal bar. When MACD's signal line crosses it's moving average, a bearish trend reversal comfirmation is given.

Trading Account Taking Profits:

Foreign Currency Trading The same suggestions as for the Long entries, it depends on how long you are willing to stay in the trade.

Yu Gi Oh Trading Card - When the 38.2%, 50% or the key 61.8% Fibonacci retracement levels (of the previous bullish trend) are reached.

Online Stock Market Trading - When weekly Cycle10 makes a bullish reversal down in it's buy zone.

Currency Forex Online Trading - When the key 61.8% Fibonacci level is reached and Cycle10 at the same time has entered it's buy zone, without waiting for a bullish reversal.

Forex Online System Trading For your profit taking decisions, the 89 and the 200 EMA, plotted on the daily chart, can also be used as important resistance and support levels to be aware of.

Stock Option Trading In general, not more than 2-5% of the total trading capital should be at risk in any trade. This prevents the trading account from being wiped out, when a streak of losses may occur, as can happen in any system.

Oriental Trading Co The trading strategy outlined in this article is in no way the "holy grail" of stock market timing. It's an opinion of when important market tops and bottoms can be expected and hopefully be useful information in this regard, a tool in the tool box, if you like.

Catalogue: Finance | Stock Market
Title: A Stock Market Timing Secret Revealed By: Arild Myklebust

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