Example Chart Setup
This page shows an example of a chart setup as used by many traders that we know. Some really good traders insist that we should never need more than 4 indicators on a chart, each designed to provide specific information. The recommendation is:
- A trend identifying tool. This is often a moving average, but can be anything that the trader thinks tells her that a trend has either started or is in progress. We show the Osi Market Trajectory indicator.
- A "range trading" identifier tool. This is almost always an oscillator of some sort. We show the Osi Cycle-Adaptive Full Stochastics-Auto
- A "support and resistance" tool. We show the Osi Price Action Support-Resistance Zones indicator.
- A volume action tool. This is used to confirm that the price action is being supported by the trading volumes. We show the Osi Volume Balance Oscillator.
On separate charts we shall usually have indicators that show us potential targets. Among these would be those that show the natural decision levels, such as:
- Overnight Low
- Overnight High
- Previous Day High
- Previous Day Low
- Previous Day Close
- Pivot Points
- The Osi_TimeSliceRange indicator, that shows the potential movement in each time slice of the day. It should ususally be set to show the range of each 30 minute time slice. It shows the average range of movement in that time slice over whatever number of days that the user specifies.
If, for example, the normal range for a particular time slice (say, 1300hrs to 1330hrs), is 10 ticks, placing a target 20 ticks away is an unlikely place for the target to be hit by 1330hrs.
The indicator is dynamic, in that it also shows the cumulative movement over the day, and uses that movement to show adjusted targets, in addition to the normal targets. Thus on a day when range expands, the projected targets expand, and vice-versa for days on which the range contracts. This makes it further useful, because anectodal evidence shows that on days that range contracts, the market tends to range, and counter-trend trades are indicated, whereas trending days usually show a range expansion.
The first 4 levels are all shown by the Osi_PeriodHiLo indicator, which can be set for either the overnight session or day session. to show both, you will have to load the indicator twice: once for each session.
U.S. Government Required Disclaimer - Commodity Futures Trading Commission
Futures and Options trading has large potential rewards, but also large
potential risk. You must be aware of the risks and be willing to accept them in
order to invest in the futures and options markets. Don't trade with money you
can't afford to lose. This, and all other information on our website, is neither
a solicitation nor an offer to Buy/Sell futures or options. No representation is
being made that any account will or is likely to achieve profits or losses
similar to those discussed on this web site. The past performance of any trading
system or methodology is not necessarily indicative of future results.
CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.