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

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This my humble attempt to mark the short and long trades using the fast stochastic ( not real time)
Padawan, nice work, let's keep it up, I've come to realise that one learns by "doing it".
Welcome back Jack, I hope you had a good time with the penguins, we would love to hear about your trip together with some pictures :D
 

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Quote from callmate:

This is my attempt marking trading using 5, 2, 3 stochastics without the price bars.
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Attached you will find my additional annotations to show 15 trades.

Again take the time to use a log sheet and log the trades. Also include remarks on the time you are sidelined.

this display is cool because it includes a lot of information. The bars are numbered and there is space to annotate.

I would place the order of elements from top to bottom as follows: price, volume MACD slow STOCH then fast STOCH at bottom.

Why? For monitoring and annotating purposes.

I drew the vertical lines to be able to corrolate the various signals that were generated. As the day goes by each vertical line segments the sequential parts of the day.

Notice that there are more trades on this day than the first chart I annotated. what causes the difference is the number of reversals which occur during times when the market is not showing a strong trend for a while.

What is the purpose of each trade? THE PURPOSE IS TO STAY ON THE RIGHT SIDE OF THE MARKET.

What is the significance of staying on the right side of the market at all times (when not sidelined)???

Here we stop and consider trading and just what is important. In trading, some sages introduce the concept of risk. Risk can also be considered with the concept of being on the right side of the market. Either you are or you are not on the right side of the market. The risk while on the right side of the market is rather low since during these times you are making money.

Sometimes we have brief periods of being sidelined. During these times you will notice that there is a right side of the market since the 5, 2, 3 is not sitting on 50, the only neutral part of the 0 to 100% range of any STOCH. Usually when we are sidelined it is during a narrow range of price variation. Our hearts do not ache to much since there is no money being made in this narrow range.

You can see on this chart as on all future charts that this signal annotation yields segments of profits. This is an empowering state of events; it empowers: support, confidence and comfort. In any business it is a good thing to not have to worry about the upside and here, there is no downside except for making mistakes. All of your charts will have mistakes if you choose to make mistakes.

this is achallenge to be able to annotate two signals on two separateparts of one chart. work hard at it and you will recognize that it can be done by mostly anyone who is working purposefully. there are no trick questions in trading. All is certain it turns out.
 
Quote from jack hershey:

after you make the log of the trades of my annotated chart, use a different colored ball point to remark about the relationship of the entries to the MACD pair of lines. Note C and D conditions especially.

Then choose another color and remark in notes about the relationship of the exits to the MACD pair of lines.
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Here's the log with MACD remarks. Starting to see some sequences of indicators with MACD, especially when both lines are outside of the +/- 1 boundaries (for example, a tendency of macd lines to first diverge above/below the larger [1,-1] tape, then converge, then slow stoch exit signal, then macd xo, then MACD divergence, then fast stoch signal). It takes some getting used to and it's not always perfectly in that sequence, but the dominoes tend to fall sort of like that, at least in this example. Also, seeing some similarities between the way the histogram and fast MACD line give warning signals similar to the way price and volume do. Hopefully some of these observations are legitimate.

After writing the last exit signal remark, there was the urge to go back and write more notes about the entries, but I figured my chicken scratch in this format is tough enough to read. Let me know if you have a hard time deciphering anything. Comments always welcome.

Nice going, callmate. Oh and for those with Acrobat Professional, you can save the .pdf docs upright by going to "Document", "Rotate Pages" and then save the document once everything's to your liking. The log has to be posted in installments as the color pdf's are bigger.
 

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Quote from jack hershey:

I first the day begins.

You wait for synch.

You use 5,2,3 to enter

time passes and you use 14, 1, 3 to exit.

You see that the next entry is 5, 2, 3 and it's exit is on 14, 1, 3.

This is the way it works.

When you are in, the 14,1,3 takes you out OR the 5, 2, 3 makes you REVERSE.

Sometimes you have to stay sidelined since there is no 5, 2, 3 as yet to take you in.

As you see mistakes are made until you have done about 50 of these consistently. I noted two things: mistakes and extensions of holds that result from several things acting in concert to prevent an action which is not certain.

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Thank you for your comments Jack and the chart.
I understand that we enter a trade using 5, 2 ,3 stochastics crossing 50 for longs/shorts. I don't have a problem with that, however I am confused with 14, 1, 3. Am I right in thinking that for a long we exit using 14, 1, 3 @ reading of 80+ and for a short @ reading of 20 or below? I will mark some more charts and post them tomorrow morning in order to clarify this confusion. :)
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