DoubleStoc Oscillator Shows the
Trading Trend For The Daily Chart
chart shows two time frames. The top weekly chart has a DBS10 oscillator
that shows the trend direction for the daily chart below it.
high in March in the weekly chart, the oscillator is moving down.
month of March on the daily chart the DBS10 oscillator drops to a low
level, and then turns up. Trading the upturn in the daily oscillator would
have resulted in a loss because the trend was down based upon the longer-term
weekly chart; and the daily Buy Signal would be trading against the trend.
the DBS10 oscillator in the daily chart moves up to make an oscillator
high at A in early April, the weekly oscillator is still moving
down showing the trend is down, and the Sell Signal generated by the downturn
at A would have been followed by a profitable drop into mid-April
as the daily trading cycle bottomed at B.
On the daily
chart, B looked like a potential buy based strictly on the oscillator
in the daily chart in the bottom Window, but the weekly oscillator
was still moving down, indicating the trend was down. Rather than
buy against the trend, waiting for the DBS10 oscillator to move up and
turn back down again would have generated a trade in the direction of
trend into another trading cycle bottom.
of the longer-term cycles opens the door to using the oscillator in
the longer-term time frame to show trend in the smaller times frames.