Stochastics

Stochastics are brilliant at giving a current assessment on PA and a future projection on the amplitude of the next move. If I'm expecting a bigger move, stochastics in pairs will help me trade the minor waves while still pointing to the primary direction.

This allows me to ignore noise/false signals in price action and take the trade most often at the extreme turn.

When I say a current assessment, I mean the reversal bar is being signalled acting as a confirmation that this PA signal is the one to take.

So I can get the following out of stochastic pairs...

trend direction
amplitude of the move... ie is it big or small (not a price level)
minor waves within the primary wave
exact reversal bar confirmation... but it's usually PA I see first

my settings are too slow at identifying huge trends early; I have other tools for that.

NB: multiple timeframes are essential

I have shared many ideas in the past, given lots of how-to clues, provided sources of inspiration and posted numerous charts. My threads were deleted as if I had stood on someones toes and the moderators were not able to tell me by whom or why they were deleted, but they were never reinstated.

As I said, I wouldn't trade without stochastics. They are utterly brilliant at helping me know when to take a PA signal, when to ignore it, what to expect next and most times say buy or sell this bar. Well worth exploring stochastic pairs. If you can get my previous posts you might find something different.
 
yoohoo wrote on 12-15-06 05:53 AM:Hi PetaDollar, can't find my Interesting Charts thread?? It was in Technical Analysis with you as moderator - can you fill me in on what's going on? Thanks.Best regards,Yoohoo

Re: lost my thread Good question.
I don't know what happened. I have forwarded your message to Baron. Pete

yoohoo wrote on 12-23-06 07:58 PM:Ok it's Christmas - so in the spirit of goodwill, what have you done with my Interesting Charts thread? If I've been naughty rap my knuckles caus' I feel like an old girlfriend hasn't turned up for a date (I've never experinced that so I'm imagining how it would feel!). Seriously though, I don't give a hoot about the thread, but I do care about the principle. So... as someone who has supported you, please give some feedback.Merry Christmas,Yoohoo

Re: Am I not invited to the party? I didn't delete your thread, but maybe one of the moderators did, so I will ask around and see what happened.

This is why I'm not busting the gut to post.
 
Quote from yoohoo:

This is why I'm not busting the gut to post.
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Hey, thanks for the info about the dual stochastic usage.

Dr. John F. Clayburg has done an extensive amount of work using this approach, and details his very interesting approach to trade entry as well.

Something to look-up, for those who might be interested.
 
Quote from silvermotion:

normally it would be going the direction of the trend you smartass.

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Those non-existent, useless charts really delivered the goods today, didn't they silvermotion? :D

Good trading (again)
 
Thanks MandelbrotSet. I read Clayburg's book looking for ideas but didn't get much because I think I have perhaps taken it to another level. However what interested me was how much information can be gleaned out of a few squiggly lines - his approach being so far removed from mine.

I combine RSI with stochastic pairs. I have not studief Cardwell because he charges many thousnads to teach how to read the squiggly lines on RSI and I think I can decipher it myself. Much of what he says about RSI applies to stochastic pairs...

The ideal technical indicator, according to Andrew Cardwell, Jr., is one that offers capability to identify and monitor the current trend, highlight overbought and oversold extremes, and give early warnings of a trend change.

"The Relative Strength Index (RSI) is such an indicator, offering the best of all worlds," said Cardwell, president of Cardwell Financial Group, Inc., based in Woodstock, Ga. The RSI "is the cornerstone of my trading model," he said.

"In the lectures and workshops I have given, I have shown how the RSI can be used as either a completely independent trading model or an addition to and enhancement of a trader's current technical approach. I use it as a completely independent model to identify trend, support and resistance, overbought/oversold levels, divergence, trend change, reversal and price targeting."

Cardwell said most traders who use the RSI focus their attention on trying to identify bullish and bearish divergences. He said basic price and momentum divergence can and does help to identify extreme overbought or oversold conditions in market momentum.

"However, most traders fall prey to the concept of divergence and see it as the end or reversal of the prevailing trend of the market. All would be right in the world if markets were to reverse from simple divergence. But there are times when sentiment and momentum are so strong that the market continues to make new highs (or lows), which will keep the RSI at overbought (or oversold) levels for extended periods of time.

"Momentum and price corrections, when they do materialize, are usually sharp and swift. After these brief respites the market is then ready to resume its normal upward (downward) trend. With each successive new high (low) and divergence formed, anxious traders are ready to call for a top (bottom) and reversal of trend. However, in strongly trending markets, multiple divergences can and do develop, which only lead to corrections of the overbought (oversold) condition of the market.

"If a trader attempted to take positions based solely on divergences, he or she would need deep pockets and eventually exhaust his or her trading capital," said Cardwell.

While Cardwell takes note of divergence, he said that only shows the market is overextended and needs to correct the overbought or oversold condition. Even though the RSI is considered a momentum oscillator, he said it has more values as a trend-following indicator.

"One of the guidelines I have established for myself is to identify a range for uptrends as well as downtrends. As the market trends higher or lower I will adjust the normal range of RSI (70-30) to account for the shift in market momentum and bullish or bearish sentiment on the part of the traders. The fact that this adjustment needs to be made in the range of RSI is one of the first indications that the market is undergoing a trend change."

The ability of a trader to recognize a trend change quickly, reverse a position and trade in the direction of that next trend is the skill that traders must develop to be successful, said Cardwell. "By having a position in tune with the trend, the trader will have the opportunity to participate in the bigger market moves, which generate larger profits."

Cardwell has what he calls "Three Keys to Success: have a trading program, patience and discipline."



The reason I am lothe to give settings or timeframes is partly, it's my private edge that I have carved out with much effort, but also because it depends on what speaks to you - what your eyes can see... the speed you can recognise it's significance and respond.

It is much better to use trial and much effort in your chosen chart set up to determine what you see, how you read it and if it is of value. But to say squiggly lines lag price action is to be philistine in ones investigation. That's why Cardwell charges thousands to show how to, for eg measure the length of an RSI move and project a price target from it.

There are worlds of immediate and future information in squiggly lines!
 
Stochastics -

Greek - stokhastikos - "to guess at".

stochastic -

1662, "pertaining to conjecture," from Gk. stokhastikos "able to guess, conjecturing," from stokhazesthai "guess," from stokhos "a guess, aim, target, mark," lit. "pointed stick set up for archers to shoot at" (see sting). The sense of "randomly determined" is first recorded 1934, from Ger. Stochastik.

Now this indicator builds confidence just from its origin.

Just a dab of humor, nothing personal.
 
Quote from yoohoo:

Cardwell has what he calls "Three Keys to Success: have a trading program, patience and discipline."
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That's OK yoohoo, those three items alone are certainly worth price of admission.
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By having a consistent process in place a trader is able to take action effectively regardless of the fact that price action does not behave in a consistent fashion.
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Quote from MandelbrotSet:

That's OK yoohoo, those three items alone are certainly worth price of admission.
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By having a consistent process in place a trader is able to take action effectively regardless of the fact that price action does not behave in a consistent fashion.
***
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Can you explain the connection to your nickname and your comment that price action does not behave in a consistent manner? They seem to be opposites. Is that on purpose?
Thanks in advance.
 
Quote from PricePhysician:

Can you explain the connection to your nickname and your comment that price action does not behave in a consistent manner? They seem to be opposites. Is that on purpose?
Thanks in advance.
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Hey ProfLogic

How you do'in?

How the YM treating you these days? ... still catching those 1 pts lifts? :p

Good trading
 
The quote is Cardwell's, not mine, and it is in the context of RSI. Sorry, but relating my nickname to the quote has lost me?
 
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