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My experience has been that StochRSI is not real good at generating trading
signals for my style of trading. I use it by paying closer attention to a
stock that is relatively overbought or oversold based on StochRSI and timing
my entry based on some other signal. Relatively overbought or oversold
could be set based on either of the pairs of values for StochRSI that you
suggested depending on your tastes, or more precisely, your stomach.
One trade that has worked well for me is to set up an exploration that looks
for low StochRSI values among a group of stocks that have a high strength
relative to the market (i.e. a high RS, not a high RSI). This gives me a
watch list of strong stocks that have corrected. I time my entry into these
stocks by watching for a violation of the near term downtrend line, a test of
the bottom put in before the trendline violation and two consecutive days
with higher highs after the test of the bottom. This tells me the short-term
downtrend has reversed and the strong stock is ready to resume its move up.
I place my stop just below the low of the test of the bottom in case I am
wrong.
Dan
In a message dated 11/10/1999 3:29:39 PM Mountain Standard Time,
nkormanik@xxxxxxxxxx writes:
<< Quick question.... Would you StochRSI aficionados prefer your 'alert'
levels for StochRSI at the 20-80 levels, or at the 30-70 levels?
Just curious. I'm watching one particular stock, following a longer-term
StochRSI, and observing that this StochRSI has climbed above the 20 level,
and still no market action. I'm wondering if it will take climbing above
the 30 level before serious action commences.
My tentative conclusion is that the 'market' is leery of a stock that is
still trading down below some StochRSI level, and will hold off buying until
that minimal StochRSI level is reached.
Please share your thoughts.
Thanks,
Nicholas >>
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