The Stochastic Indicator

[jack hershey]

Quote from JohnnyK:




Jack,

I am graphically oriented. Please look at the chart from Jan 6 included below (see link) and tell us how close I am to understanding the points you made regarding:

1. 1 Min bars
2. 3 points to define a channel
3. Dry up
4. Volume increase pushing the change

Does the sample chart and the suggested signals there present the picture you are trying to get across?


Thanks.

JohnnyK

This does as you suggested it would.

furthermore, thsi is a very good viwing of the "end effects" of a given day. You can see how the P, V relation is working very well on the 1 min and how it describes what's up on the trading fractal , (the 5 min).

thanks for the examples. They link the 5 and 1 min charts quite well. And there was some good trending too. On the other hand, these last weeks have been driven primarily by global news which is quite disturbing to our economic mileux.

 

[nkhoi]

Quote from Scrutch:


The part that confuses me is where Jack is talking about { " Point 1 is first on the right side; point 2 is “away on the left. What we need last is the second point on the right side. It is point 3. " } ... Something I'm missing here but not sure what it is.

Jack is heavily into NLP so his lingo take on diff meaning, take a look.. see how 1 right line position diff from other right line position. Now you now where is 'left' and where is 'right' from the right line.

 

[Scrutch]

Quote from nkhoi:



Jack is heavily into NLP so his lingo take on diff meaning, take a look.. see how 1 right line position diff from other right line position. Now you now where is 'left' and where is 'right' from the right line.

Thanks nkhoi,

Looking at your graphic It looks like the point 2 side will always be the "left" side with the right side on the point 1 and point 3 side. Makes a bit more sense now. I thought we were to look back in time from the point 1 to find point 2. Thanks...

 

[jack hershey]

Quote from Scrutch:



JohnnyK,

The graphics you posted helped me to focus on some of the things that were referenced by Jack. Thanks for posting them. The part that confuses me is where Jack is talking about { " Point 1 is first on the right side; point 2 is “away on the left. What we need last is the second point on the right side. It is point 3. " } In your graphic you're showing a normal channel but Jack is talking about point 2 being away on the LEFT... Something I'm missing here but not sure what it is.

You need three points to define a channel. The right side is where the channel will cone to an end.

Point 1 and 3 define the right side. You draw a line parallel to line 1-3 through point 2. By doing this you define a lot of things.

You can see how the price is contained in the channel and you can use and offset to define your stops for protection.

The moce valuable part of a channel is when the price fails to continue to get to the left side. This is an "end effect" of the trend. Right after this failure you can "see" the place to exit the trend.

The types of exits include reversing into congestion and slaloming along doing trades the opposite of being whipsawed.

If the trend is a slower one you can reverse into the retrace of the trend and form the next points 1, 2, and 3.

Thirdly, when there is a failure in the retrace, and it looks like congestion at that point, you do sometimes run into a resuming of the initial trade with the trade being offset by this immediately past price action.

The four phenomena that WJO has latched onto is the cup and handle this is where the action is a four oclock drift at the price level associated with the peaking price in the former channel.

All of these things hapen in sequences of indicator volume and price action. Once we get rolling we can see how each situation peels off from the main theme and always feel confident trading each one of them.

There are some more traditional formations I didn't note like double somethings, head and shoulders and so on. We, here, are going through how to make money instead.

 

[jack hershey]

Quote from tampa:

All in all, not a good day. Most days I feel as though I've learned something - but not today.

The 1m MACD is my "best friend" on entries, but is killing me while in a trade! Frankly, I have no idea what the 1m Stochastic is supposed to be telling me.

Overconfidence did me in today...

01:19 Short @825.25
01:23 Out @825.25

Entered "early" on a cross of the 50% line, and just chickened out.

02:02 Short @822
02:09 Out @822.75

I "cheated" on this trade with the Histogram only at -.38 - chickened out AGAIN, taking 3/4s where a 1 1/2 should have been had.

03:21 Long @ 825.75
03:23 Out @825.75

Simply misread the numbers - it was not a signal. so I closed the trade.

03:29 Long @826
03:31 Out @825.50

The one-minute MACD did me wrong - should have been a gain of 1 3/4.

Bottom line: 4 trades - 1 win - 1 loss- 2 washes - plus 1/4

For the week: 12 trades - 6 wins - 3 losses - plus 5 points.

As far as I am concerned, it was a tough day, and a tough week. On the positive side, my losses are few, and small. But I continue to sabotage myself with a lack of discipline.

I'm watching all this closely. I am going to write you up in word and transfer it to here. I will put in a fix for you that will knock your socks off.

 

[jack hershey]

Quote from Scrutch:



Thanks nkhoi,

Looking at your graphic It looks like the point 2 side will always be the "left" side with the right side on the point 1 and point 3 side. Makes a bit more sense now. I thought we were to look back in time from the point 1 to find point 2. Thanks...

I thanks you too. You are so very helpful.

It is very true that I am "fixing" people. I am chatting so hat a neutral bias will always be creeping into a person's consciousness.

People also find out that they either have a vertical or horizontal orientation. When i was at IBM in the 50's we had to fight throught that for logic design too. (See "think" magazine) about 1957.) Right is the future; left is the past.

We are watching time move and our screens are always showing "NOW" on the right side.

If you are in a vertical orientation, then making money is just a little more difficult.

I can now see that I need to , when I introduce something, to go to basics.

If everyone will, please go to chapter 20 of WJO's how to make money in stocks" and set up a landscape chart of he 18 common mistakes people make. Do a present inventory in a cloumn and do two past ones as well: when you started to invest and half way to now. Picj a few to drop immediately and then inventory periodically from now on.

Watch for Tampa "fix". I will want to conclusively get to you all on the difference between interative refinement and building foundations and which one comes first. I taped out the 20/80 part for a reason. We need to get to a basic objectivity on being rich. It is not difficult to be rich; and it doesn't take any significant amount of time or start up capital. What is does take though is getting to a very conscious exciting mental and emotional state.

I need to build some very kewl jiminy crickets here.

 

[fawaz]

hi all and good day for all esteemed traders here

I noticed in the previous posts ( 51 pages ) that all people are discussing JACK HERSHEY methods ( stochastic ... macd ... rocket ) i real all the posts and I am confused that i could not understand what is the method is .... I am a FOREX trader , I have my own method and it provides good and consistent profits and would like to know more about JACK's method .... what time frames to apply ... could it be used to trade FOREX ... Metals ... and what are the rules to apply setup .. settings ... all required details when to buy or exit .... in trend or range markets .... what are the use of the three slow stochastic 5,2,3 -10,2,3 - 14,1,3 how do we use them what is meant by xo ... in some posts ....

So kindly if any one can explain where can i find a simple pages / web sites / books for this method with all details explained all in one .... I appreciate a lot


have a nice day

 

[nkhoi]

there are no "simple pages / web sites / books" , info are all over the net, this thread is as comprehensive as you can get. And if it look complex then give it sometime, you don't learn to speak a foreign language in 1 day, do you.

 

[trendy]

Quote from fawaz:

hi all and good day for all esteemed traders here

I noticed in the previous posts ( 51 pages ) that all people are discussing JACK HERSHEY methods ( stochastic ... macd ... rocket ) i real all the posts and I am confused that i could not understand what is the method is .... I am a FOREX trader , I have my own method and it provides good and consistent profits and would like to know more about JACK's method .... what time frames to apply ... could it be used to trade FOREX ... Metals ... and what are the rules to apply setup .. settings ... all required details when to buy or exit .... in trend or range markets .... what are the use of the three slow stochastic 5,2,3 -10,2,3 - 14,1,3 how do we use them what is meant by xo ... in some posts ....

So kindly if any one can explain where can i find a simple pages / web sites / books for this method with all details explained all in one .... I appreciate a lot


have a nice day

What? You mean after reading all 51 pages you still don't understand Jack's system? Don't worry, nobody else does either.

 

[dawg]

wow. some real good info posted. thanks for for responses.

i was definitely not looking for point 3 for channel formation, and didn't look at the 1m...was too concerned with my losing trade. the graphs and info put a real good picuture of what to look for in the future. thanks for all your help.