Carved In Stone...This is as easy as it gets...the indicators on this chart are your chess pieces...if you don't play chess download an app and play it; its a mental exercise builds good focus...in chess you're managing 8 pieces plus some pawns and then there's the other guy you have to defend against while trying to kick his ass...the stock Market is easier so stop letting it kick your ass or make you afraid...=all you need to know is UP/SIDEWAYS/DOWN...have a definition of overbought/oversold ...understand momentum...understand sentiment...and learn/know how to act at certain moving averages 10-20-50 and 100 and KNOW HOW TO ACT AT THE SIGNAL LINES OF YOUR TECHNICAL INDICATORS.
The next few comments I'm going to say should be carved in stone...
PRICE is the best indicator... price can only move UP/Sideways/Down. Try not to make this game any more complicated than this.
(Humans seem to feel its their purpose in life to complicate things)...if you agree with this, you're wrong...so make it and keep it SIMPLE.
You need to know how to act
when PRICE is overbought/oversold and know how to act when price
is at certain moving averages...Price moving above/below any of these averages is a signal...to read what price is saying you need 2 technical indicators; CCI 20 and stochastics 10,2...
10day moving average is KEY...10day average is part of the Grail averages. PRICE moving above
the 10 day average says the BULLs are trying to take control... IF
CCI 20 and slowStochastics agree with this assessment= then BULLS are indeed in control. And its the opposite for when Bears are trying to take control =when price moves below
the 10day average...If your technical indicators agree, then you can be confident price is likely going lower. You are now an expert with UP/Sideways/Down.
CCI 20 is your overbought oversold indicator and it is also a momentum indicator and it points direction...CCI has 3 signal lines that require your attention -100/centerline/+100...all the other movement within this indicator is noise...I only want this indicator to tell me what its doing at its signal lines and when price is at certain moving averages...
Slow Stochastics 10,3 is your MOMENTUM indicator...fast line crosses slow line suggests a change in momentum...(Consider CCI oversold/overbought. CCI 20 more than likely has signaled already...I could take the CCI signal when it was at the overbought/oversold signalline...or I can wait a little and make the Grail averages tell me more=3day cross 5day average or I can just wait on a 10 day signal..what is important you want price and then the averages and the 2 technical indicators working together). Why the 10,3 setting for stochastics= because 10 is based on the 10day average=so fast line cross slow line is "relative" to what momentum has been doing the last 10 days...if this fast/slow line cross happens when stochastics is oversold...and then stochastics comes out of oversold pointing up=I have MOMENTUM on my side. always get stochastics on your side...Stochastic has 4 signal lines= fastline cross slow line, and 3 signal lines 20/50/80 that define oversold/overbought and centerline levels. The only thing that will override these technical indicators (CCI and Stochastics) is NEWS that changes Sentiment
...trader's sentiment indicators are volume and On Balance Volume (OBV)...accumulation distribution lines and Money Flow MFI...Usually you will see CCI and Stochastics change before the senitment; but when NEWS happens Sentiment can turn on you in seconds. ( for the near term = 3 to 10 days; there are other sentiment indicators that you can learn such as advancing volume VS declining volume and advancing stocks verses declining stocks these 2 sets are what are considered Market Internals...http://bigcharts.marketwatch.com/markets/default.asp
...then there are the $TICK and TRIN...) TRIN, be sure to read page 2 here...it can be a difficult sentiment indicator... http://www.onlinetradingconcepts.com/TechnicalAnalysis/ArmsIndexTRIN.html
3month Chart http://schrts.co/XMqAJg
07/12/18...There have only been 2time in the past 3 months that CCI has become oversold. You need to decide how you're going to act as signals start to happen. (with more experience you can look at the intraday charts and try to be a little earlier with signals on the 30minute or 60minute chart...)
The last time PRICE was oversold was late June as PRICE was testing the 100 day average...Price even went outside the lower bollinger Band and reversed (bounced) and then came back down=retesting recent low prices...It was an easy trade SPY 270 (S&P 500= 2700) was the game...price got back inside the Bollinger Band looking for direction...bounce and falling back staying above the 100 day average and then UP...You can see how CCI and stochastics were acting when this was taking place...
That 100 day average appears to get a lot of trader's attention if you look back at the other times price was testing the 100 day average. YOU need to be ready when this average and the 50 day average are being tested by knowing what your technical indicators are saying...same goes for the other average I listed.
AND THEN YOU DECIDE IF YOU WANT TO TAKE ACTION...AND TAKE THE TRADE...TEST IT...
You are now an expert...give some back to a good cause...