Wednesday, 28 April 2010

Evening deal

"Traditional" trading thinking would have it that once the stochastics move into the the >80 territory it is in overbought territory, and <20 territory is oversold. On examination of charts would seem to indicate actually going long on the "overbought" signal and short on the "oversold" is a more succesful route as the stock keeps trending up until the point at which it changes direction. It is then at the trader's discretion to take a profit.
This would seem to avoid the prediction trap that I have been falling into.


P&L = +1 woot!

Maybe use RSI to dectect once a trade should be closed when it moves into >70 territory (overbought) <30 (oversold)

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