In the markets, what goes down must go up
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Scalping IV using Stochastic oversold entry signal ..
After the stochastic signal prints, place a Buy Stop order at that bar's high
but only ON A DOWN BAR...Continue to trail that Buy Stop down as more signals fire if the original order is not yet filled...
I color the candlestick BODIES green for up bars (positive) and red for down bars (negative).
The candlestick OUTLINE colors are normally white for positive and red for negative but the Stochastic Signal LIME outline color will over-ride the normal colors when it's active.
A Buy Stop order can get you in...yet still protect you if price fails to move in your anticipated diection.
In this example I "couda" trailed the entry order down looking for a better fill, following prrice
as the signals printed AND I "coulda" opted to raise my initial Target once getting filled...
I chose to let my initial brackets determine the results (5 point Stop...12 point Target)
Runner - using STO O/S as entry signal
Also note the histogram divergence (esp visable in the price pane)
and in the study note
the rising histo slope (orange dots) & the stochastic HOOK (yellow dot)
Right chart - The Aqua dot on the fast MACD moving average and white dots staking up as the trade progresses
Trade Mode charts on monitors 5 and 6 ... Slightly different timeframes, different indicator colors
and differing on-chart trading configurations.
Price OHLC bars and a "semi-standard" 12,7,26 MACD are in the upper pane.
Removed the Slow Stochastic, leaving the Stochastic TA and MACD (bi-histograms)
with a 2 period SMA of the fast MACD moving average in the study pane.
A frequent pattern that forms throughout the session is the 1-2 Punch Pattern.
The orange Slow Stochastic line crossing up and over the yellow Stochastic TA can
also be used as stand-alone signals as can MACD histogram divergence...
Divergence and stochastic are often the first to suggest a potential reversal of price direction.
They usually happen before the MACD moving averages begin to turn positive (aqua diamond)
and before the histogram crosses the zero line (white triangle)