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TFC Commodity Trading Forum

Re: Dec Crude/Testing Support.again/Silverbear.

You have HAWK eyes for sure,lol. Oddly enough I was looking through that Jake Bernstein book "The Ultimate Day Trader" and noticed his recommendation on using the MACD setting of 9-18-1 (along with the Momentum 28 indicator) for divergences with price. I have used this MACD SETTING for years but just with intraday charts long before I got his book but it struck me to compare it to my RSI 21 setting when I read it again. Notice how close they track each other. I have always been concerned with the RSI 21 being so 'jumpy' and ragged which causes it to whipsaw. Nothing pisses me off more than whipsaws other than gaps. And lengthening the RSI won't change its character. Plus the RSI 21 is as good as it gets with that indicator and works exceptionally well to determine bull or bear when on one side of the 50 line in most time frames. I can't improve it with my software. I see the MACD setting this way 'smooths' out the indicator and still closely follows the RSI 21. I didn't care for the Momentum 28 setting though as it missed a lot of divergences and whipsawed worse. So I forgot that MACD setting was on the Crude chart when I posted it. Just compare the two for closeness! His book didn't just use a divergence to buy. I've found while a turning point is 'usually' at these points there are enough times price continues its trend and ignores the divergence and if taken would trash you or at least stop you out. He takes a buy or sell signal on a 'breakout over the MACD line's previous high' "NOT" the price action. Interesting concept I hadn't payed a lot of attention to for whatever reason. See (page 177) Ch.10 onward for charts and explanation as I know you have the book. Also read the 1st paragraph on page 309 just for a laugh................