Some TA questions e-mailed to our helpdesk (jan 2008)

[alexchartfilter]

1) Question: In the " trading signals" section on your site , the MA/EMA
criteria indicate " buy when the n-day MA crosses down through
the price line" and "sell when the n-day MA crosses up the price line" ?
Shouldn't this be the reverse? please advise. thanks


Answer:
No, if the price rises above the moving average then the price
is rising. If the price crosses down through the MA then the price is falling.
See this link for a graphic example:
http://www.chartfilter.com/screenexamples/masignal.htm
Please note that moving averages are trend following indicators.

2) Q: I want to learn how to trade rolling/channeling stocks. Do you have such
an area in your web site?

I am assuming by trading rolling/channeling stocks your intent is to swing
trade. Our newsletter section has a couple of strategies for swing trading.

This system is quite popular for index/blue chips. Before you use this
system, paper trade until you understand why it works.

http://www.chartfilter.com/newsletter/nl44/nl44.htm
http://www.chartfilter.com/newsletter/nl46/nl46.htm
http://www.chartfilter.com/newsletter/nl47/nl47.htm

Other systems can be found at our archived newsletter page:
http://www.chartfilter.com/archivednewsletter.htm

For strategies for finding swing trading stocks, try this out:
http://www.chartfilter.com/screenernewsletter/nl5.htm, you may need to
adjust some of the screening criteria for your risk/price range.

3) Question: best macd numbers to use

The parameters of your indicator should be based on how long you plan to
hold/trade the stock for. This is different for every person.
Based on your time frame, adjust the parameters to fit. The larger the
numbers, the longer term (and less sensitive) the indicator becomes, the
smaller the numbers the more sensitive the indicator is to recent price
movements.

For more information regarding parameters, these newsletter should help:
#24: What do the different parameter values really mean to the trader?
http://www.chartfilter.com/newsletter/newsletter24.htm

#50: Changing your parameters to fit the trend you are trading
http://www.chartfilter.com/newsletter/newsletter50.htm

For more information on MACD see:
http://www.chartfilter.com/education/indicators/18.htm