Something very simplistic

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I would hazard a guess that he is using stochastics as a directional indicator, not an overbought or oversold indicator. If they are heading up then buy or if they are heading down, short. He is taking a snapshot of the stochastics.
 
Originally posted by aphexcoil
I do think rtharp brought up a very valid point. There is usually only ONE way someone can use an indicator -- because if you could use it TWO ways, how would you know when to use either one?

If your system relies on the Stochastic being in an oversold position to enter, that oversold position may either signify:

a) A dip of an oscillation period

* OR *

b) A strong trend pusing up

Obviously, the guesswork of when to take the trade has been removed as it relates to both time and money-management. You've already determined how much you are willing to win and lose for each trade -- and you know when each trade is to take place.

That merely leaves a decision of "Do I go LONG or SHORT" at each of these times.

So far, you've been right more than you have been wrong. I'm not sure how you are using the Stochastic or how you are using other indicators, but it will be interesting to see how it performs when the market changes gears and starts running strong again. These past few days have really been somewhat choppy at times.
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Surely there is more than one way to use any given indicator. Again, why limit yourself to using stochastics to indicate "oversold" or "overbought".

Maybe I based my decision only on the spread between %D and %K at the given time. If more than 23 I go long, less than 23 I go short. (not saying I do that). Even given that - how many possible combinations of period, smoothing, and period can be used to calculate the stochastics? I might use 5, 94, 43. And I might calculate it on the opening price and not the close like is "standard". I might calculate it on the low. I don't limit myself to what is supposedly the "right" way to do it.

I'm not looking in the toolbox and trying to figure out what to build based on it. I'm deciding what I want to build first, then trying to see if I can do it with the tools in the toolbox.
 
Originally posted by macal425
I would hazard a guess that he is using stochastics as a directional indicator, not an overbought or oversold indicator. If they are heading up then buy or if they are heading down, short. He is taking a snapshot of the stochastics.
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Nah, that couldn't work, could it? That isn't how you are supposed to use stochastics. :D
 
Interesting thread Quah. For any eSignal users out there, I've whipped up an EFS which will highlight the 1min fibonacci bars to enter on.

1. download: http://share.esignal.com/download.jsp?groupid=2&folder=&file=fibMarker.efs
2. save to your eSignal formula directory (ie 'C:\Program Files\eSignal\Formulas').
3. open a 1min ES #F chart.
4. right-click, select 'Add Formulas' -> 'fibMarker.efs'.

*IMPORTANT* if you are NOT in the Pacific timezone, do the following:

1. right-click, select 'Edit Studies'.
2. select 'fibMarker' from the drop down list at the top.
3. enter the appropriate startHour/Minute endHour/Minute for your timezone (ie, if you are in the Eastern Timezone, enter '9' and '4').

This is a screenshot of what you should see:

http://share.esignal.com/groupcontents.jsp?folder=&picture=fibMarker.png&groupid=2

The grey dots indicate that the NEXT bar will be the fibonacci bar to enter your trade on. The red dots indicate the fibonacci bars themselves.
 
Originally posted by Dion Loy
Interesting thread Quah. For any eSignal users out there, I've whipped up an EFS which will highlight the 1min fibonacci bars to enter on.
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Cool. Maybe I can get an indicator named after me - quachastics sounds cool. :D
 
Originally posted by Quah

You ever use a kitchen knife as a screwdriver? It doesn't make a very good screwdriver, does it? But it works okay as long as the screw isn't too tight.
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hey, I get your point, you are 1 sharp dude :D
 
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