The Stochastic Indicator

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Quote from dawg:

i have been looking back at past days charts a lot and trying to get better recognition of slow trends....finally thought i spotted it correctly today anyways here is what i saw:

10:20 rocket signal that is also a reversal candle.

10:25-10:35 market slowly backs off, stochs leave rocket zone, macd xo but #s are very tiny, more like pretzeling

10:35 stoch reading of 50 fast line...got me thinking maybe a slow trend an it should halt around here and form a point 3. volume continues to get lighter.

10:50 bull flag formed, volume tapered off and the 10:50 bar is a low volume inside range bar..break of range would also trigger bull flag. volume on irb is 2,450 (lowest of day) high of bar was 881.75.

went long on break of irb at 882. and now had a slow trend channel to also work with.

they key for me was spotting the 50% stoch acompanied by lower volume and slower price action. after the 50% reading market formed an irb 2 bars later and broke up from bull flag to continue the current trend. also on break up of irb volume was 6,667 compared to 2,450 of inside bar.

anyways my 2 cents....maybe some progress on the slow trend recognition. hope this helps.
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Sorry I haven't been attentive. Lots of stuff going on here.

You find the slow trend using icebergs. The wednesday down trend was just interrupted once and youdid two ice bergs. An am one and a pm one.

For today the iceberg went all day.

This is how intermeditaes make 10 points a day just letting it grind out. What you notice is that ice bergs keep you in a trade and they let you see tha most of the time there is no really tricky things to consider. This is a very good relaxation technique.

After acquiring a few months of rockets and icebergs just about anyone creeps up to enough capital for two then three then four and finally five contracts.

Three rockets on a day or a 10 point iceberg when you are doing 5 contracts begins to get you ready for doing the expert level stuff.
 
Be sure each day to note the VDU's and what happens on the 5 min within a couple of bars.

This is a training exercise for doing BO's off the 50% of STOC and the neutral of MACD.

The last two days the slow paced icebergs showed you how the MACD entwines "off" neutral. You can see that you are making money all the time when both lines are cruising "away" at least .4.

The ES gives you steady money velocity every day. By doing the point 1,2,3, you get used to staying in the full trends as well.
 
Quote from jack hershey:



You find the slow trend using icebergs. The wednesday down trend was just interrupted once and youdid two ice bergs. An am one and a pm one.

For today the iceberg went all day.

This is how intermeditaes make 10 points a day just letting it grind out. What you notice is that ice bergs keep you in a trade and they let you see tha most of the time there is no really tricky things to consider. This is a very good relaxation technique.
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The 15 min chart can keep you in the slow trends longer. Look at yest and today's charts: there was a short/long rocket that started at 11:00 and lasted the whole day on Wed/Thu. MACD was entwined "away" the whole time. I noticed this just now (didn't trade today).
 

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Quote from jack hershey:



Sorry I haven't been attentive. Lots of stuff going on here.

You find the slow trend using icebergs. The wednesday down trend was just interrupted once and you did two ice bergs. An am one and a pm one.

For today the iceberg went all day.

This is how intermediates make 10 points a day just letting it grind out. What you notice is that ice bergs keep you in a trade and they let you see the most of the time there is no really tricky things to consider. This is a very good relaxation technique.

After acquiring a few months of rockets and icebergs just about anyone creeps up to enough capital for two then three then four and finally five contracts.

Three rockets on a day or a 10 point iceberg when you are doing 5 contracts begins to get you ready for doing the expert level stuff.
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I am somewhat confused. I thought we were suppost to reverse when price fails to make the traverse across to the other side of the channel. This occurred on friday at 11:15 am. Should we stay because of the possibility of the iceberg or reverse because of the possibility of a reversal? I actually i ended up washing and got long again at the BO of the ftp at 12:00pm. thanks

jc
 
Good point nwb.
My take: if you trade rockets and use channels, you can get out early on failure to traverse to the "away" side.
If you trade slower trends using icebergs, you stay in the trade until the lines come out on the same side you entered.
 
Quote from vorzo:

Good point nwb.
My take: if you trade rockets and use channels, you can get out early on failure to traverse to the "away" side.
If you trade slower trends using icebergs, you stay in the trade until the lines come out on the same side you entered.
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What i learned from friday on the failure to traverse is that it can lead to a wash, reversal, or the creation of a new point 3(trend continuation). the reversal ended up being a wash and i waited before entering a new trade because i saw a BO,FTP forming that could either turn into a reversal or new point 3. It ended up being a new point 3. the only problem that i can see with this is if after you reverse, it becomes a wash and an immediate trend continuation without the price traversing to the right side of the channel to create a new point 3 or confirmation of the reversal. If this would happen than you would miss out on the rest of the trend until you jump back in on the next point 3. I am guessing that the odds of that sequence happening(not reaching the right channel line before trend continuation) is low due to the price not reaching the traverse to the left originally with the volume falling off. I guess you just have to look for those flaws.

just some thoughts.



jc
 
Quote from nwbprop:


the only problem that i can see with this is if after you reverse, it becomes a wash and an immediate trend continuation without the price traversing to the right side of the channel to create a new point 3 or confirmation of the reversal. If this would happen than you would miss out on the rest of the trend until you jump back in on the next point 3. I am guessing that the odds of that sequence happening(not reaching the right channel line before trend continuation) is low due to the price not reaching the traverse to the left originally with the volume falling off. I guess you just have to look for those flaws.

just some thoughts.



jc
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To summarize, there are 3 possibilities:
#1 failure to traverse -> new point 3 -> trend continuation
#2 failure to traverse -> CCC
#3 failure to traverse -> trend reversal

I don't think you can anticipate which one will occur.

#3 you would clearly benefit from reversal. #1 and #2 you'd have to be careful if you reverse, likely you'd end up washing. If you can detect CCC or new point 3 formation early on you can get out for a small profit.
To play it safe, you can exit after failure to traverse and reenter after new point 3, or upon confirmation of trend reversal.
 
1. long rocket

9:50 s(100, 90.94) macd hist +.45 10,080

long on the break was not happy about having number coming out at 10:00 a buying runup to the numbers, but held...mkt sells of on number...stochs leave rocket zone s(62,85) and exit when low of 10:00 bar is broken.

long @ 896.50
sell @ 894.50 -2.00

day: -2.00 24 days: +41.00

2. rcoket failure---->macd xo--->reversal

uptrend had already been broken, exited my long position (losing) and while i did not reverse immediately was looking for a reversal play...

10:10 reversal bar looking short...macd xo...short on reversal bar setup during 10:15 bar @ 894.50...funny thing is this is exactly the price i exited my long rocket position.

10:25 rocket short signal s(17.24, 21.75) macd hist -.83 9,941

market moves sideways, but stoch still in rocket zone...exit during 11:00 when tiny range is broken upward @ 890.00 and stoch pokes above 27.

short @ 894.50
cover @ 890.00 +4.50

day: +2.50 24 days: 45.50

3. ronge b/d--->rocket

2:05 break long uptrens that i had in place...got short @ 890.25...rocket signal at 2:20, but next bar is a low volume inside range bar and puts me on alter...first low breaks and then high is taken out...exit when high is taken out @ 890.00

short @ 890.25
cover @ 890.00 +.25

day: +2.75 24 days: +45.75
 

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24th day of trading was today...last weekly recap was on 14th day

last updates totals (14 days)
38 trades
16 winners
19 losers
3 flats

+29.75

24 day update (including 4-21):

65 trades
27 winners
34 losers
4 flats

+45.75 total gain

45.75 x 50 = 2,287.50 total gain

commish
65 x 2 x 2.40 = 312.00

24 day net gain on one contract = 1975.50

feel as if i got myself back on track after a horrid 4-7 to 4-11 week -1.50 on the week...and 3 day losing streak of -15.50 where i completely lost track of myself.
 
Great job dawg, it looks as if you've tripled your initial capital in 2 months.
Nice morning reversal too.


My trades:

#1 rocket after synch
Long 894.25 9:45
Sell 896.25 10:01
Tough holding through a -1.75 drawdown on the 9:45 bar. Long channel from yest still valid -> 9:55 volume drops as it touches left side -> exit as price started dropping -> rocket fails
+2.00

Decided to take profits at away side and reenter if trend resumed.
Should've reversed at the same time though.

#2 failed rocket reversal. Reversed after closing 1st position.
Short 895.50 10:04
Cover 896.25 10:10
Sold at high of 10:10 bar as MACD didn't cross yet and 10:05 bar looked like a new point 3.
-0.75

#3 rocket at 10:20 -> entry after point 3
Short 890.75 10:32
Cover 889.25 10:55
10:40 channel break, MACD convg but stoch still good -> waiting for new point 3 -> volume dropped and it looked like congestion -> exit
+1.50

Was away from computer till 14:30

#4 VDU BO. Mkt was rangebound.
Long 890.75 14:44
Sell 892.00 14:50
Exit as volume on 1m dropped.
+1.25

Day +4.00
14 days +37.50 (39 trades)
 

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