Tham khảo tài liệu 'trade secret forex trading using intermarket analysi_4', tài chính - ngân hàng, đầu tư chứng khoán phục vụ nhu cầu học tập, nghiên cứu và làm việc hiệu quả | trade secrets very useful in spotting market turns as will be discussed later. The momentum oscillators evaluate how current prices compare to previous prices and provide clues about overbought or oversold conditions that suggest a possible change in price direction. These indicators are most reliable in non-trending situations when prices are moving up and down. However in trending situations these indicators may give a buy or sell signal early in the move and then just remain stuck on that signal as long as the trend continues. Look at the euro chart with the stochastics indicator as an example of this problem Figure . A downside crossover of the two stochastics lines above a reading of 80 indicates sell and an upside crossover Figure . INDICATORS PROVIDE MORE OBJECTIVE INFORMATION. INDICATORS SUCH AS STOCHASTICS CAN PROVIDE TIMELY SIGNALS IN CHOPPY MARKETS BUT BECOME UNRELIABLE WHEN MARKETS TREND AS THIS EURO CHART ILLUSTRATES. THEIR BEST USE MAY BE IN SPOTTING DIVERGENCE-PRICES GO ONE WAY AND THE INDICATOR GOES ANOTHER. Source Vantagepoint Intermarket Analysis Software 42 forex trading using intermarket analysis below 20 indicates buy. Stochastics indicators give a good crossover sell signal at the high in April but then show a crossover buy signal in May during the middle of the downtrend. After giving a signal too early the buy signal provided by a stochastics reading below 20 persists for more than a month until the market finally does bottom in early July making that indicator relatively worthless to the euro trader during the time the market was trending downward. Even though the oscillator indicators often are not reliable in trending conditions they can still provide some good clues about future price direction because of divergence that is while prices may hit a new high or low the indicator reading does not. Divergence is a visible signal that the indicator is seeing some underlying weakness or strength not revealed by the .
