Saturday, April 26, 2008

26/4 Trading and trending markets

From John Murphy's "introduction to technical indicators and oscillators":
Because leading indicators generate more signals, they are best used in TRADING markets. These indicators can be used in TRENDING markets, but usually with the MAJOR TREND, not against it.

In a market that is trending up, the best use is to help identify oversold conditions for buying opportunities and vice versa.