Join Date Feb 2012 Posts 23

Stochastic or RSI?

I was reading up on these indicators that are for seeing if the market is overbought or oversold. I was wondering if anyone has gotten a sense of whether Stochastic or RSI works better. They both seem to be essentially for the same thing. Maybe one works better under certain market conditions?

Hey there Holden

I was unable to PM you so I’ll run the risk of breaking some rules for the sake of helping new people out a little.

First of all I would suggest some good reading material that you should have a look at and study. Here goes:

The Disciplined Trader — Mark Douglas

This is one of two great books by Mark Douglas. Trading psychology is maybe the most important thing in trading and your mind is your most precious asset when it comes to trading and many other areas in life. A must read!

Trading In The Zone — Mark Douglas

This one is very similar to the first one and also a very good and precious read when it comes to hone your mind for proper trading mentality.

Japanese Candlestick Charting tecniques — Steve Nison

A great book that will teach you everything there is to know about candlestick charting and candlestick patterns. I also strongly suggest Beyond Candlesticks by the same author. The second one builds further on the concepts presented in the first book.

New Market Wizards — Jack Schwager

This book present you with a series of interviews with Americas top traders. It is very inspirational and there are a whole lot of golden nuggets in it when it comes to trading psychology and it also motivates you a lot. A very good book indeed!

Technical Analysis Of The Financial Markets — John J. Murphy

This is THE book about technical analysis and encompasses all the important things there is to know about it. This one should be your first buy after you have finished the School here at BabyPips.

There is of course a lot of other important books out there, but I would suggest you start with these I’ve listed above, before we dwell into more specialized concepts, strategies and techniques. As far as online resources go here is a good list of sites that will help you a lot on the way (along with BabyPips of course which is the GREATEST resource for beginners):

A great Forum and Calendar! Full of knowledge and helpful people. Here you will find everything from good trading strategies that people share and discus to foundamental market information. Have a go at it and you’ll see what I mean.

The greatest online resource about trading and investing. As the name suggest it is a investing encyclopedia of titanic proportions. It’s hard not to find answers to questions here. Along with explaining all investing concepts it also provide great tutorials and articles.

Hope this will do as a study introduction on your trading journey! PM anytime if you wonder about something or feel you are ready for more reading. I’ll do the best I can to guide you further! Let me know! Good trading!