Yes my crashindex but to lazy to publish it I don't use stochastic model any more 
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Anything better than Stochastics???
- Thread starter donaldduck3419
- Start date
HEre is the problem with Stochastics: as stated earlier in the thread they are only accurate in a sideways market, where the market is bouncing back and forth in a range..
If a strong up/down trend exists, they will read overbought/oversold continoulsy and give bad signals...
But that is the million $$ question. When is the trend going to break out of a trading range??
If you can assume it is a low-volume day without much major activity causing breakouts (like last friday, much of wall street was already on vacation) , use the stoch's to ride this trading range back and forth throughout the day..
If a strong up/down trend exists, they will read overbought/oversold continoulsy and give bad signals...
But that is the million $$ question. When is the trend going to break out of a trading range??
If you can assume it is a low-volume day without much major activity causing breakouts (like last friday, much of wall street was already on vacation) , use the stoch's to ride this trading range back and forth throughout the day..
Quote from donaldduck3419:
Does anyone know anything that is a better overbought/oversold indicator than stochastics? I have been using them for a while now, and I am sick of them being inaccurate most of the time. When the stock is in an uptrend, they show overbought, yet the stock keeps going up. And vice versa for downtrends.
So, I am wondering if anyone knows any other better, more accurate indicators??? I have been using stochastics for the Don Miller strategy, thats just something to keep in mind if you will be answering.
you're using the wrong indicator(s) for the given strategy.
Quote from TSOKAKIS:
I will slightly disagree.
I too disagree. The stochastics can be used as a trend indicator and that is exactly when it stays above 80 for a longer period of time. Plus, a good reliable reversal in a strong trend is signalled by a stochastics divergence rather than some sort of stochastics crossing. Stochastics crossings can be used only when trading in a more or less flat range (BBs pretty much horizontal or slightly trending up or down).
These are quite elementary observations and yet people tend to use stochastics as if it could be applied in all possible conditions without any other filters. While this is true, the keyword is 'filters'.
Quote from stock777:
Don't be confused with a 'system' and an 'indicator'. They are two different things.
A system tells you what to do. An indicator requires interpretation and user intervention.
Stochastics, as well as all other indicators are not in and of themselves 'systems' that will provide long term profits (except randomly). Basically, blindly buying oversold and selling overbought will send you to the poorhouse eventually.
Good points. A system cannot be based on just one indicator and even less so on its wrong interpretation.