Hi Sexton.
The question is When viewing Daily do you use 14 then with weekly also use 14 or should you be increasing or decreasing that number? ---- SAME STOCK -- PURELY BASED ON THE TIME FRAME
(I suppose EVERY indicator is different -- so to apply that to say RSI (it defaults to 14) or Chaikin Money Flow (20)).
To make it clear:
Obviously the numbers are "defaults" and have a meaning. One can research more and leave as such or adjust them - a particular indicator against say a UTILITY stock might not be reflected properly unless you adjust the number.
E.g. If one looks at Utilities they tend to have LOW PE ratios. The theory in the DOT BOMBS were that Tech stocks that had a high PE ratio were warranted because of the business (we realize today and then this was bogus).
There are probably lots of opinions on this, so I'll give you mine.
I use the defaults for the indicators. I use the same defaults whether I'm working with Daily, Weekly, Monthly, or even Minute charts. My eye is accustomed to reading the indicators with these defaults.
If the indicators for different sectors behave differently, I haven't noticed it, and it hasn't affected my trading.
One of the really great things about StockCharts.com is the ability to back-check for various parameters. So for example if you decided that the 13 MA crossing the 50 MA was a worthwhile signal to watch for, you could do a scan of stocks from several days (or weeks) ago, and then look at how the stocks from that scan behaved subsequent to the cross. You could vary any of the indicators and do the same sort of back test. Just takes time.
As for your comments about the P/E's. This moves into Fundamental analysis. In my case, I use the charts for Technical Analysis. I do look at the fundamentals, but usually after I've found stocks with the charts.
That's one answer to your question. Hope that helps.
Cush
AI
