Stochastics

Jack, you say...

"Trading is a precise mathematically based effort. There are no descretionary things like those that you raise in your Q's."

On some markets, like ES, there is an astounding mathematical precision, but it's not always there in the way we see it. Take channels as an example... they may give perfect reversals and then the channel fails. Someone else may see it as an exact fib reversal, but I was using channels and didn't see it until close to or at breakout.

Your channeling technique requires lots of trial and error, lots of adjustment and discretionary skill. The mathematical precision can be seen with hindsight but there were lots of adjustments made to the channel lines because of random noise within expected boundaries or channel breaks.

The way institutions use channels requires very little adjustment. It is all automated and when the precise mathematical relationship is reached it is clear, obvious and easily programmed.

I think what you are doing is so discretionary it would be impossible to programme. I have seen attempts on ET to understand what you are doing and backtest it. It made me laugh because it's so discretionary such backtests are doomed to failure.

Discretion is an essential part of any method where precise mathematical, mechanical rules cannot describe what the trader is seeing.

If you system is not discretionary, get it programed and make a fortune.
 
Quote from silvermotion:

lol a macd cross

also note that the green candle in question is also a reversal candlestick pattern in itself, a kicker + bullish engulfing.
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Clearly not a macd cross. Not enough lag.
 
Quote from jack hershey:

I recommend that people start with the "standards".

For example on pp 352 of Magee (7TH) you can see the original and the updated original.

If a person is making a third pass on the standards, then I would recommend a book like the one I named before: "Trading from A to Z" It is written by Achelis, the CEO of Equis Corp which does the Metastock platform. You can do the highlighting of the old defaults and put in the contemporary ones and have a lot of info in the same place for reference.

For example, in A to Z the are six ways mentioned (pp 271) (mathematically) to run the %D. And another variable is introduced.

On the Web Chris Lott spent many years getting the Q and A part of TA available to the public. there you can read about some of the transitions indicators have gone through with respect to modern technical innovations. It is in 24 parts now (alphabetically organized.).

If a person is doing P&F they may get to 3 bar and then renko. In A to Z these things are all cross referenced and their relationships are compared and contrasted.
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You know what's funny Jack? I would have bet money you weren't going to post a stochastics equation.

Anyway, I've got plenty of trading books but not Edwards and McGee I'm afraid. So, if I may, let me rephrase the question.

What is T H E stochastics equation(s) that Y O U use?

And just to make it both simple and time efficient for you to respond how about if you post J U S T the stochastics equation(s) that Y O U use.
No explanations, no obfuscation, no history "lessons" and no off topic banter.

You know, for us mere mortals.
 
silver - what you said was correct re PA but it was a poor quality move down in PA terms. Could easily have resulted in noise.

The indicator said it was ok to expect a decent return for an investment and to take the trade before the herd got in - before the PA signal completed.

This allows for a bit more profit and a closer stop.

An indicator can qualify a trade and get an entry before the PA traders have got their confirmation.

I rely on PA but benefit from indicators. I think this is a very good example because in PA terms alone, it is a risky noisy trade. To take a green candle when the move down has so many overlaps is very risky.
 
After many experiments I removed all indicators from my charts and currently use just PA, volume (both raw and bid/ask) and S/R (both horizontal and trendlines).

In FX just PA and S/R for obvious reasons.

For me this turned out to result in earlier and better r/r entries.

When I used indicators, my fav. was CCI for it's ability to be fast enough.

I know people who use indicators and make way more money in % return than me, but they certainly don't just trade XO's too.

More like Yoohoo have posted - they get a feel of indicator as a clue before it actually confirms something by crossing or turning.
 
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