Stochastics and price action

[Lamont_C]

Quote from HoustonMark:

And you would be missing the better half of the boat.

Reverse or hidden divergence is actually more reliable than regular divergence. It indicates trend continuation instead of a reversal in price. The link I posted above will enlighten you on divergence and the different types.

"Divergence" is just another tool employed by professional money to fleece the amateur, like Fib, "pivot points", and so forth.

There may be feints and fakeouts, but the only "divergence" -- if one could call it that -- that matters is that which occurs between price movement and the level of trading activity.

LC

 

[Buy1Sell2]

Quote from feb2865:

I've been toying around with Stochs(14,3,3) on 1 minute charts(YM) along price action and I found some sort of consistency. As I don't have access to historical data other than the current June's contract, I would like to know those who has been using this indicator along with price action for some time your experiences in terms of consistency.

Please don't put out this "I trade only price" thingy or "you're a whimp because you use indicators" crap that is all over this site. As I said before is the stochs WITH price action. Not intended to fuel a stupid debate about indicators to see who has the biggest balls.

I will appreciate if you try to be specific and stick to the subject.

Thanks

Stochastics indicator is very good, however I use RSI which is a bit more reliable. Stochastics can be used by itself if you want. Your main issue will be that you are trading a 1 minute chart and your slipppage and commissions will negate the effectiveness of the indicator. You will most likely not be nimble enough , or your broker platform will not be, to take advantage of the moves on the 1 minute chart. Thank you for your time. ---Ishmael

 

[Buy1Sell2]

Quote from Lamont_C:

"Divergence" is just another tool employed by professional money to fleece the amateur
LC

Actually divergences are amongst the greatest tools available.

 

[Buy1Sell2]

Quote from HoustonMark:


Reverse or hidden divergence is actually more reliable than regular divergence.

Reverse divergence is called Trend.

 

[Buy1Sell2]

Quote from IronFist:

I thought I remebered hearing that divergences were reliable less than half the time.

What's a hidden divergence?

Probably Class B and C divergences are 50 percent of the time. Class A's are more than 80 percent.

A hidden divergence is one that doesn't exist. Thank you for your time--Ishmael

 

[HoustonMark]

Quote from Lamont_C:

"Divergence" is just another tool employed by professional money to fleece the amateur, like Fib, "pivot points", and so forth.

There may be feints and fakeouts, but the only "divergence" -- if one could call it that -- that matters is that which occurs between price movement and the level of trading activity.

LC

Indicator/price divergence is not the grail....but it is definitely a tool worth paying attention to....either as confirmation to enter a trade or if you are in a trade and wondering if the trend will continue or not....divergence can provide very useful clues in both situations if you are able to recognize them...

I see no relationship between divergence and fibs/pivots....fibs and pivots are calculated levels....divergence is not.....

It is a difficult concept for new traders to grasp, so most ignore it....you can almost hear the refrain "this seems hard so I probably don't need it"....

To over-simplify it, if you see price heading in one direction and your favorite indicator headed in the opposite direction, it is well worth your time to notice it and understand the potential outcome....whether you take action or not.....

 

[HoustonMark]

Quote from Buy1Sell2:

Reverse divergence is called Trend.

No disagreement with your statement at all...however, to put it more precisely.....

Reverse divergence between an indicator and price confirms that the trend will likely continue....and there is a well defined relationship between indicator and price that reveals reverse divergence...

 

[HoustonMark]

Quote from Buy1Sell2:



A hidden divergence is one that doesn't exist. Thank you for your time--Ishmael

Reverse divergence/hidden divergence are one and the same and it definitely exists regardless of which term is used...

 

[rcanfiel]

Quote from optioncoach:

Ignore him, he trades intraday "hypothetically" and was touting a website before Magna called him out on it and he trades off of support and resistance but claims technical analysis is worthless.

speaks for itself...

I don't just trade hypothetically. The website was not touted as it was clear and explained that subscribers were never allowed, and I said supp/res had value but are really not used in my trading. Magna called me out on nothing, as I said in multiple ways that there was no attempts to sell anything, including in PMs to Magna. Other than that, you are pretty close.


The thing that speaks for itself is the fact that TA is always discussed by its believers, but never proved. Freecharts.com (barchart.com freebie site) unintentionally does a very good job of shredding TA. Using 1-2 years of real data, these are the real-world results of 3 main stock indexes. Note they all negative to strongly negative. Looking at all the other commodities on the site show similar results if followed over time:

Nasdaq
http://freecharts.com/Commodities.aspx?page=perform&sym=NDY0
S&P 500
http://freecharts.com/Commodities.aspx?page=perform&sym=SPY0
Dow Jones
http://freecharts.com/Commodities.aspx?page=perform&sym=DJY0

This contains 13 popular indicators, having diff lengths of MACD, Bollinger Bands, ADI, CCI, MAs, Trend Spotter, Parabolics

 

[rcanfiel]

Quote from feb2865:

and who gave you an invitation to participate in this thread????

didn't you read the first post???

You mean, stop confusing the matter with facts??