If there is a certain tendency/trend on the market, there is no sense
to trade against it. The life rule "not to go with the stream, struggle
against all trials and tribulations" doesn't work on the market and in
short term trading systems. The trader should feel a successful tide to
use it for attaining his/her own aim. Maybe, you will ask why we have
used the word "feel" as emotions should be out while operating with
trading systems (as it is set in
trading system
definition).
The answer is simple: here, "feel" means to act due to experience,
analysis, and knowledge. At first glance, it may seem that everything
is done thanks for intuition, but a very profound basis and
background is behind all decisions made.
A good approach for measuring the intermediate trends
is combining the signals of moving average convergence
divergence
(26-12-9 days) and slow stochastic indicators. The combination
of
the two parameters increases reliability of the processes. Short term
trading systems have its own trading signals that should be taken into
account. They are different for long and short positions. Some useful
tips
for long positions are as follows: looking for buy signals when both
moving average convergence divergence (MACD) and slow stochastic
indicators are above their lines; taking signals if one of the
indicators has not crossed its signal line below acceptable
level;
exiting when two parameters are below their signal lines. If we speak
about short positions, it is a reverse process that includes several
steps steps, namely: looking for sell signals when the MACD and slow
stochastic cross their signal lines below acceptable level; taking
signals if one of the parameters is not above its signal line, and
exiting when two parameters are above their signal lines.
