In reference to signals, the rules are actually very simple, although there is an unique algorithm behind the simple visual appearance. Blue color candlesticks denote longer term bull market, whereas red color candlesticks denote longer term bear market. The primary rule is to enter long positions only when the market is bullish, i.e. blue color candlestick. The opposite is true for short positions, go short when candlesticks are red in color. The long signal is triggered when oscillator on the chart crosses above 0 line. The short signal is triggered when oscillator crosses below 0 line. Exit signal for long trade is triggered when oscillator crosses below 0 line. Opposite is true for the exit signal on short trade.
I use signals to trade DIA or SPY symbols. You can even double up and trade the signals with ProShares ETFs (Ultras). Another instrument I use to trade these signals are stock options. I buy DIA call options when system generates a buy signal and buy DIA put options for short signals. Lastly, I use this system as a general market timing tool for managing my stock portfolio.
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