Thursday, September 4, 2014

Why not to crowd charts with indicators.

Using RSI or Stochastic, Measures the same (momentum / buying or selling). Like same story different version. Here is a proof.

Its like 1+1 = 2 or 2+3 - 4 = 1. End result is the same.

Still not convinced?

Its the same chart, same indicator. With different lookback periods.

First chart with RSI(3) and Fast Stochastic(8)
Second chart with RSI (3 & 14) and Full Stochastic (14,3)

both stochastic has the % D lines hidden. In my opinion its just a freaking distraction to traders.

Its up to you to use whatever you want.

But knowing how to use them is the key. Not how many you use.

Hope, this helps. 

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