Jack Hershey – MACD and Stochastics helpers for 123 and FTT's

[tradingbug]

I put this in the other iterative refinemnt journal but it probably belongs here.

If one uses the indicators JH recommends, pull up a monthly timeframe, and most if not all are crossing the sweetspot....neutral.

 

[Padawan]

Thank you so much, Mr. Hershey, for sharing your work, time, gifts, example and so much more with all of us. Callmate, thanks for creating the thread. I want to contribute positively to the efforts here. Attached is my first attempt at the indicator drill. The chart is from yesterday. More to come...

 

[Padawan]

Noticed a couple errors. This will happen a lot. Let's try again.

 

[Padawan]

Here is today's chart with the indicator drill. Comments welcome.

 

[ehorn]

Quote from Padawan:

Here is today's chart with the indicator drill. Comments welcome.

Hi Padawan,

My general comments are that the stochs provide strong confirmation of the "right side".

But when compared to volume and price, gaussians and channels - my observation is that they (stochs) somewhat lag (i.e. in real time) as indicators of change.

Personally I cannot find better indicators than volume, price, channels and gaussians, along with knowing what must come next... Simple, Powerful, and Profitable!

My assessment is in no way an attempt to diminish these indicators as I am certain that I do not have the eyes of more seasoned veterans and I am quite possibly not gleaning all I can from the addition of these indicators at my stage in the journey.

YMMV

 

[Padawan]

Quote from ehorn:

Hi Padawan,

My general comments are that the stochs provide strong confirmation of the "right side".

But when compared to volume and price, gaussians and channels - my observation is that they (stochs) somewhat lag (i.e. in real time) as indicators of change.

Personally I cannot find better indicators than volume, price, channels and gaussians, along with knowing what must come next... Simple, Powerful, and Profitable!

My assessment is in no way an attempt to diminish these indicators as I am certain that I do not have the eyes of more seasoned veterans and I am quite possibly not gleaning all I can from the addition of these indicators at my stage in the journey.

YMMV

Thanks for the reply, ehorn. I agree with your comments about the bare necessities. It seems like the creator and followers of this thread are just trying to add some pieces to the PVT puzzle to build an invincible MADA. My desire is the same, along with being a helpful part of the process as we absorb what Jack is offering. What got me most interested in the thread was this statement, "I use indicators as leading indicators of price and volume with the understanding that Volume leads Price." Sounds important. Plus, knowing indicator sequences couldn't hurt in Fx where volume info isn't like futures. But mostly, all of this is fun

 

[PointOne]

Quote from Padawan:

What got me most interested in the thread was this statement, "I use indicators as leading indicators of price and volume with the understanding that Volume leads Price." Sounds important. Plus, knowing indicator sequences couldn't hurt in Fx where volume info isn't like futures. But mostly, all of this is fun

Yes - good for you. The Stoch (5,2,3) is a proxy for A/D. I therefore don't see the harm in keeping that indicator to complete the P, V, A/D analysis. What's more, Jack has often pointed out that the 50 crossover in low volume conditions is a good heads-up of an imminent volume break out. Yes, a price indicator that in certain circumstances is a leading indicator of volume. If you think about a short time frame stochastic, it is very similar to pennants analysis. Both get you back on the right side ASAP based on price action.

 

[northchuck1]

I'm having a little trouble on one interpretation of the Stoch.

Assume we're in a dominant traverse of a down channel. The slow stoch is pinned at the bottom. Then the slow stoch starts to move up, crossing the 20 line. An indication of change, so exit, and reversal if trading SCT.

Then the fast stoch crosses the 50 line, indicating sentiment change. But I'm really in a non-dom traverse, an entry here could put me on the wrong side of the market. As the slow stoch approaches the 50 line, it then reverses and heads back down. This is followed by the fast stoch peaking (below the 80 line) and
reversing, going back below the 50 line. So I had two entries of the fast stoch crossing the 50, then reversing from the other direction. What would be my exit/reversal point based upon the stochastics indication. I really didn't ever have the slow stoch go to the other side, then cross over 80 indicating an exit/reversal, so when would I exit. Would this end up being possibly a low profit/wash trade based on the fast stochastics (reverse when fast stoch
turned and went past the 50 line in the other direction).

I haven't closely watched this in real time, but it looks like this is happening based on some of the posted charts. Trying to understand what the stochs are telling me. And wondering if I would look to the MACD for any addl. info.

Also wondering when Jack might be back to enlighten us in general on the MACD.

 

[Tums]

Indicators DO NOT produce Red Light/Green Light signals.

You have to analyze the information in its context. i.e. look a the big picture: where is the 20MA? what is the PRV? Where is the LTL/RTL ?

 

[northchuck1]

I realize that stochs are not a red light/green light indicator.

But you can't deny that on a dominante traverse where the slow stoch is pegged, a cross back to/past the 20/80 line is a pretty good indicator that the dominant traverse is over for now.

But on non-dominant traverse, the slow stoch kinda drifts around toward the 50 line, not as strong an indicator for change.

If the fast stoch xover 50, I can see that decreasing volume indicates a non-dominant, vs. increasing volume indicating a dominant traverse. But still when to reverse ??

Just trying to find addl. clues for the dominant traverse. In my simming early winter, I was tending to have good timing on the non-dom traverse, but rotten on the change over to dominant traverse. At my ability level, I'm having a harder time finding signals of change around the RTL than the left. Find myself making lots of little gains during non-dominant, then losing on the dominant, finding myself on the wrong side of the market. I know a couple of other posters have had the same problem, probably from diving too deep into the "rabbit hole", and not observing the forest and trees.