The Stochastic Indicator

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Quote from vorzo:

ges and dawg,

You make a valid point that I was aware of when I started to backtest. There may be intrabar signals during the day that may ruin your profit margin obtained taking the signals that DO show up on the historical charts.
For argument's sake, let's say you trade the strategy purely mechanically, and you take all the entries. If you have 4 false intrabar signals during the day, and you have a 2 pt stop, then you would have a -$400 loss in stopped trades each day, or -$24k for 60 days/contract. Scary :eek:

But, we don't actually use stops when we trade like Jack is teaching us, we do wash trades if they don't go our way, and we have other signals to validate the primary ones. My understanding is that Jack's methodology is not supposed to be traded mechanically, but instead used as training wheels to help us understand and feel the market.

The only way to know for sure would be to write a code that would use consecutive 1 min data points as closing values for the 5 min bar. That way you'd have 5 intrabar points in your stoch plot that may catch an intrabar signal. And this would still be an approximation, you'd have to go to tick data points to be fully accurate. I'll think about a way to code the 1 min data points into a 5 min chart - any ideas are welcome.

Fruity,

I posted results for entry on bar close - return was ~ $1k/mornings, so about $2k/60 full days, or about 0.75/day. Bummer.
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Nice dialogue on this stuff. And thanks for the effort too.

the points you bring out on the descretionary aspects of the mechanicalset up are really very important part of transitions.

A major easily programmable facet would be to consider the 50
% line. If there is sufficient strength to not have a hitch or stall (no harmonics) on transitions to entries, then I say first op in the sequence is a go; if not, not. This precursor eliminates the fractal change course of action for a cure.

We should try for a rocket and wash combo as a baseline for making improvements using just one contract. Then add icebergs. Then add point 1,2,3 stuff.

Once we get there, and I see people making money (meaning exercising belief as actions), I will get more keen on the doubling profits routine.

I think back testing can be more broadly understood at some point and these dialogue is very constructive. It is hard to discuss stuff until a basic minimum quality shows up. Is everyone exponential rather than arithmetic at this point?
 
Quote from vorzo:

ES03M simulated.

#1 rocket
Short 847.75 @ 9:47
Cover 843.00 @ 10:08
+4.75

Entry after synch was over, rocket signals all there.
PMI was reported at 10:00 but decided to ignore the knee-jerk reaction.
Then a sequence: 1 min MACD divergence -> 5 min MACD convergence so I got out.
MACD crossed at 10:15 and fast line left the area at 10:19, so using the sequence gave me a better exit price in this case.
Nice setup for a MACD reversal intermediate.

#2 rocket
Long 847.75 @ 10:56
Sell 847.25 @ 11:10
-0.50

Channel already in place with a point 3 at 10:16, entry on rocket signals.
Exit on following sequence: 1 min MACD cross down (11:05) -> 1 min MACD divergence, then below zero -> fast line leaves 80 -> right side of channel tested. Besides volume vas VDU. Could've gotten a better exit if I had waited 2 more min but didn't want a bigger loss as rocket failed.

#3 rocket
Long 852.75 @14:39
Sell 855.25 @15:08
+2.50

Entry on rocket signal, volume surge after dry-up period.
Exit sequence: 1 min MACD cross below 0 -> 5 min MACD flat -> fast line out. Besides, high retest was on low volume - 5 min up bar at 15:50.
I was tempted to exit 1 min after the 1 min MACD crossed down, at 14:58, and price tested the away side of the channel with the slow uptrend since morning, as I had it drawn (I failed to recognize the lateral channel - Jack thanks for posting the charts they help a lot). This exit would've given me 0.50 more but the rocket signal was till on so I stayed in.

#4 rocket
Short 850.25 @ 15:39
Cover 846.00 @ 16:00
+3.25

Entry on rocket signal and increasing volume.
1 min MACD crossed up at 15:46 but on low volume and 5 min MACD still looked good, so I stayed in.
Sold on cash mkt close, at 16:00. Whoever stayed in 5 more min scored 2 more points.

Total 10 points - awesome day.
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Nice report and terrific trading.

I can see you are beginning to groove (integrate the whole nine yards). This is terrific.
 
10:21 L @854.000
10:35 X @852.25

Entered on a Long Rocket -1.75

10:35 S @ 852.75
10:50 X @847.75

Reversed Short on the Failed Rocket - exited when prices approached the bottom of the 15M Channel - +4.5 points

+2.75 on the day
 
to day you have first chance to speed up fractal.

starting on the 5 is normal. You do glance at the 1 min for synch on DJXX.

On 1 min (scale of two points) you see centering between 9:45 and 10:00. The false BO down is a non entry (Stoc fast line flaw) and you pick up two rockets ("entwined" keeps you in until 10:22 or so where the BO on the channel occurs.

The short trade from 1 min ends with channel BO too.
 

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Why would you move to a 1 min chart today? By entwine do you mean that below the 20 or above the 80 band that the stochastics fast line and slow line are crossing each yet not breaking the 20 and 80 band?
 
ES03M simulated

#1 rocket

Long 851.00 10:06
Sell 852.25 10:34
+1.25

Entry only at 10:06 as waited for slow line to climb higher because of 10:00 report move. Sequence 1 min MACD cross up -> divergence -> 5 min MACD above 0 -> fast line in.
Exit sequence: 10:24 1 min MACD crossed down -> 10:25 5 min MACD convergence -> 10:28 point 3 in channel ->1 min MACD below 0 then entwine at 0 -> fast line out/channel broken -> exit

#2 MACD reversal
Short 852.00 10:34
Cover 848.25 10:51
+3.75

Entry: reversal out of long trade but a few seconds later after closing rocket trade. 5 min MACD cross down shortly after.
10:25 hitch in stochs around 50 area; 10:45 1 min MACD cross up but moves down were on high volume, and corrections on low volume.
Exit sequence: 10:51 1 min MACD cross up, volume declining on 5 min down bar, price at support -> chickened out.
Should've waited for point 3 at 10:57.
Fast line got below 20 at 10:49 but this rocket never took off.

Possible reversal out of failed rocket but stayed out as volume dried up.

Happy Fool's Day to all!
 

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Quote from cornholetrading:

Why would you move to a 1 min chart today?

*****When you see a 5 min bar showing a length like you did after centering, you have prima facia that something is up. A while back when our interest rates affected economy (before economy went global( Greensapn announcements and news affected markets. To take the Greenspan ride you had to be on fast fractal.

*****Today we are seeing a nice mini greenspan. The chron on the bar is best understood by looking at the way the BO's come in detail. You go inside the bar to look; this means speeding up monitoring to the "pace" of the trading. Five points a minute is a good money velocity. We go to that place. Our approach works on any market pace (fractal). We will go through many stages of money velocity.

*** there are people here who say the money velocity is always low year after year; they have not had any advantages in trading as yet. Now that we can pull down 10 points on a day like yesterday and 20 points in a week, we are beginning to look at making money. Today the first two trades were at a rate of 10 points per hour.

Since we are going to go through 8 doublings of money velocity, we have to consider all fractals for trading. I strongly keep people off the one min initially to get them to trade on the proper fractal. we glance "ahead" occassionally. You will see people here doing 100 trades a day and making nothing. They are also flat out risk wise and will screw it up royally on a day like today.

*** read the thread "Market loves Bad Econ..blah blah in Trading forum. Eqt Trader, dg....green..bung... they were on the wrong (too slow) fractal. You have to consider ignorance and stupidity as differing things. If either is there though.. you get bad consequences. Watch the butterfly boys when market pace changes. In all the cases there is no volume factor. Today the volume on the BO bar drove you to 1 min immediately. You pop into the 1 min and your set up for trading is immediately transferred and in play using the same mechanical rules. we will see later when everyone is grooving how descretionary compliments the mechanical.

*** Soon money velocity will be a guide for you. Right now we are moving from 2 1/2 point days to 8 times that in 5 days and on to 4 times that in a day and this am to 2 times that in each of two trends in an hour.

****Right now we are riding on the five min. Intermediates could enter on a centering BO and beginners on a rocket during the sceond traverse of the intermediate trend. These 2 1/2 pointer multiples are being acked up continually.


By entwine do you mean that below the 20 or above the 80 band that the stochastics fast line and slow line are crossing each yet not breaking the 20 and 80 band?

***"entwining" seen as one thing as you describe it. It gives you permission to "stay in the trade". What entwining is in terms of maths is this: It is a volatility measure. The volatility is seen as fast line rapid change. That is the market is popping off bursts of trading. Think cooking pop corn. Hear it.

you are filling your money bag with money in bursts continually. Let all the pop corm pop for you; who wants to eat unpopped pop corn. If you read this aloud, you will be "fixed" on "entwining".

*** If you smoke women's cigarettes "Hang in there, baby" is what entwining is all about.
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Okay the tape on 20/80 is working just fine. We stayed out of the "short" viewpoint that prevailed on ET this am. we had some 1 min action for the first time. Now back on the 5 min we are just raking it in continually as channeled intermediates and rocket beginners. The channel gained strength. we have seen three stronger channels in the last two days. Calibrate yourselves for this; it definitely leads to making money faster.

be on look out for trend endings. then congestion, convergence and centering for pm
 
Quote from cornholetrading:

What is a centering BO out and what does this trade setup look like? Can you take me thru the steps of this centering BO trade?
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Sure thing. Shoot me your chart for today so I can see where you are in annotating it.
 
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