Number 50

Overview

In this months newsletter we will use different parameters in our stochastic indicator to see the short and long(er) term trend.

Review:
Newsletter 44 - technical indicators and the DJIA
Newsletter 46 - showing the end of the DJIA uptrend
Newsletter 47 - A look back on the DJIA
Newsletter 49 - DJIA with Stochastics and MACD

Indicator review

The fast, slow and full stochastics (explanation of the differences)
All stochastics articles
MACD report
All MACD articles

Definitions

Convergence
Divergence

The charts

We have all seen something like this, our indicators conflict and the question is where will it go?

The real question is what trend are you trading?

If you are trading the longer term trend, the current correction can be ignored. There is no clear entry signal and therefore waiting would be the preferred strategy.

The short term trend (this also means you are NOT trading the long term trend):

By knowing what trend you plan to trade you can avoid situations like these. Setting your technical indicators to the trend you plan to trade will reduce conflict between the indicators.

The question here is not if the index is going up or down, the real question should be is the short or long term trend changing. As a technical analyst we are interested in trend changes not predictions.

If you have any questions or comments post them to our Yahoo discussion group.

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If you need assistance with any of our terms check out the glossary. With over one thousand terms we are sure you will find what you are looking for.

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Have a look through our index lists and we are sure you will find something new for your trading strategies.
- Dow Jones - NYSE - AMEX - NASDAQ - TSE/TSX -

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