Quote from Lucrum:
I guess the confusion on my part is that there doesn't seem to be a logical correlation between the colors and the stochastics. How are the colors determined?
Oh, it's logical ...
it just isn't obvious.
The colors represent a measurement of
price momentum.
If you read back through the thread, you will see other posters giving detailed explanations on how they use stochastics ... in fact on page 2 I believe is a complete synopsis.
After that you will see (well, actually, you won't see because he took them down) some brilliant charts constructed by
silvermotion which show the measure of the stochastic tool in combination with
price momentum (specifically being used to determine whether it is in agreement with the stochastic indicator, or not).
After that, you get some rather excellent charts posted by
yoohoo on how he uses
ribbon stochastics to effectively do the same thing that I and
silver motion are doing, which is measuring
price momentum as it relates to the stochastic signal.
***
Note: What
silvermotion,
yoohoo and
myself are doing is we're showing the readers how they can use stochastics in combination with price momentum to make better trading decisions.
What we are not doing is showing the reader exactly how we do it (but the clue about Buffy's B-Line stochastics should be enough for the more enterprising reader).