Can you help me with this chart?

Discussion in 'Newbie Questions' started by lucacrebbe, Jul 8, 2018.

  1. lucacrebbe

    lucacrebbe Trader

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    This is not forex market, it's another kind of market , more volatile and with big price's swings and gaps and much less liquidity. But the TA is the same with the same indicators (MACD, ONbalanceVolume, Stochastic)

    I don't understand this chart: as you can see at the big green point I have drew on the chart there is a breakpoint and an upword movement (with no volume).

    What I don't understand is why the stochastic is much more reactive and less ''lagging'' if compared to MACD... as you can see it clearly shows an upword movement (at the big grren point I 've drawn on the chart) showing a clearly buying momentum... in this situation for example how to distinguish a fake buy signal from a true buy signal? How do you scream out the false signals?

    Then as you can see after the big upword movement the Stochastic starts to decrease below the 80 line, anticipating a downtrend before it was shown on the candelstick chart

    we can see a clearly divergence between the stochastic and the candelstick chart, which is not so clearly on the MACD

    The stochastic settings are (14 --3--3)

    If we keep on reading the chart we see that bollinger bands are well spaced from each other (not compressed, this means there is volatility and the up trend is not going to end)... and the two lines of the MACD are the same very spaced from each other but in a downtrend and it seems that there is going to be no sign of an upword movement

    BUT if you see stochastic at the same levels you can see that the two lines are very close each other... so my question is how to interpretate a signal like this?

    P.S. I know it's not forex... it's another kind of market, very volatile and with less volume, but the principles of tecnical analisy should be the same... so would be very appreciated any help to interpretate this chart and which signal to keep as ''true signals'' and which one to discard because ''bad/fake signals'' on this chart... thank you,
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  2. Enivid

    Enivid Administrator Staff Member

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    It looks like you are thinking about indicators in a kind of a wrong way. Indicators to do not dictate - they just indicate. Sometimes, one indicator is more accurate than another; in other cases, the opposite might turn true. You cannot find "true signals" in any market however you combine the indicators.
     

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