Anything better than Stochastics???
- Thread starter donaldduck3419
- Start date
There is a math oriented guy that has a system based on nothing but Stochastics at:
http://www.stockspredic.com
Max
http://www.stockspredic.com
Max
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.
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.
I often use a DEMA(StochD(40),t)
with steady or variable smoothing.
See the recent
http://www.elitetrader.com/vb/showthread.php?threadid=15667
as also the
http://groups.yahoo.com/group/amibroker/message/38446
DELL application.
It is an idea perhaps to enjoy the last part of the trend and avoid premature exits.
Aloha donaldduck3419,
I love a good question on a sunny afternoon.
Gnomeâs nothing at all has to be better than Stochastics for overbought/oversold, because that is not what Stochastics does.
Don they are all better. Stochastics is not an overbought/oversold indicator. Dr. Lane has said so many times. The only signal that will cause you to buy or sell is Divergence between Stochastics and price.
Livermore explains clearly. âNo price can get so high you cannot buy, nor any price gets so low that you cannot sell.â
Maybe Stochastics is just giving you the proper signal âTo Soon!â
Stochastics does not show overbought.
The price move may have just gotten started.
Oddiduro brings up a very crucial point with Stochastics. Look back over how Stochastics has worked on the same security in the past. Try to pick up the rhythm.
DblArrow has brought up the most interesting and least understood new interpretation in the use and abuse of Stochastics. The infamous Stochastic Pop.
OK its like this, when prices rise so rapidly that they go from below 15 to over 80 almost instantly. Then you want to stay long, buy new highs (in Spreads), until Stochastics falls below 80.
Thatâs the rough and almost.
15 and 80 are arbitrary; your numbers of periods is arbitrary. What you do is arbitrary. But in general, you understand that you have extreme upwards momentum. If this momentum remains constant, the indicator will level off. When the rate of acceleration decreases the oscillator will turn down.
You understand that prices can be still in a steep uptrend, but just a slightly lower rate will turn Stochastics.
Again, Chris is correct in suggesting that you experiment with parameters until the fit your style of trading.
George Lanes suggestions are in my post âStochastics and Bollinger Bands!
> The George Lane configuration is to use 5 periods for %K.
> Plot it with a 3 period exponential moving average of %K for %D
> Plot it with a 3 period exponential moving average of %D for SlowD
> Show all three lines over price.
Charles explains the real reason Stochastics is not an overbought/oversold oscillator.
How can it be a confirmation when Stochastics leads, Stochastics precedes price. Stochastic happens first.The main valid complaint with Stochastics is it happens to soon.
With Spreads Stochastics can get you in on the close of the first day a trend starts. If you want a little Livermore insurance, you can easily get in on the second or third days close.
Timeless Wisdom. Just use a simple trendline.
Is this a Ross Hook?
-ooO-(GoldTrader)-Ooo-
Or you can use the last reaction high or low.
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Is this a Ross Hook?
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Yes and no. A reaction is a move counter to the primary trend. Since this goes back to Rhea, if not before, it predates Ross by around a hundred years.
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Is this a Ross Hook?
--------------------------------------------------------------------------------
Yes and no. A reaction is a move counter to the primary trend. Since this goes back to Rhea, if not before, it predates Ross by around a hundred years.
Just a thought - take off the 20 and 80 lines, put in a 50 and only buy when above the 50 and only sell when below the 50. Buy the first crossover of the 50 or if it comes back close to the 50 and turns back up get in. Play with the settings, and see what YOU think.
Make 'em pretty, Chris
Make 'em pretty, Chris
You are in a rather tough place at the moment.
I remember on channel 13 in NYC (In the 50's) there was a PhD from Columbia University explaining the influence of agriculture on the Constitution vis a vis the Hartford Convention.
I had to call in to the station and get him "fixed". When he and I spoke it became clear that he didn't catch on to arithematic at some point in his career.
If you will, consider overhauling your understanding of maths from bottom to top. At this point you are not going to be able to move ahead until you do.
When I lecture at MBA places, I always check to see if the students have any maths in their background; usually they do not. It isn't possible for them to get anywhere until they do some catch up work somewhere.
At this point, you are really screwed.