MACD and Stochastic, How effective is it in day trading?
If you are a stock trader and you might have probably come across various stock technical indicators. You started to read in the news or on video that some indicator worked. But when you tried to adapt them in your trading, it doesn’t work anymore. When MACD gives sell, you start to sell and when it displayed oversold, you start to buy the stock.
It doesn’t work that way because stock market is about emotions and you must be able to find the people’s emotions. How can you find the levels from the technical chart? Stock charts are used only for the reason to determine the levels to hold the stock. if you don’t combine the news of the stock with the resistance and support, you can’t succeed. Find the resistance and support in the stock. This is the first step to make when you are trading the stock. Second step is to find the market sentiment about the stock, which also involves the volume analysis.
There is no free lunch, you will not achieve success if you don’t work hard and keep the basics right. We look out for retracement along with MACD buy or sell. Wait for the market to make the lower high or higher low and follow with the indicators. After the indicators have reacted, wait for the volume to act. We need more volume for the trade to be successful.
Trading is never 100 percent successful, we all have a trading system which is easy and simple but not many follow the same. It is also vital to place stop loss and have a check on your money management skills. If you miss the stoploss of a stock, you are sure to lose. Book your profits at the right time and buy them again at the right time.
There is a psychology that exists behind every investment, the reason is that the valuations are less at the time and you are hopeful for a higher price. It happens to be a successful trade or investment if you’re planning well in advance.