The Stochastic Indicator

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Quote from elindydotcom:

Unless I'm misunderstanding the term MACD as you use it, my charts show that MACD extremes of 0.4/-0.4 rarely occurs. So, the opportunity for entry into a trade, as defined, rarely occurs. On my charts, many days and sometimes weeks go by without the .4/-.4 extremes being hit.
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elindy:

Allow me to jump in here. You are clearly misunderstanding something. I'm looking at the MACD on my 5 minute chart, setting of 5-13-6. On Friday alone there are too many 5 minute readings in excess of either .4 or -.4 to count my friend. That includes every single 5 minute bar from about 9:55 CST to 11:00CST.

My guess is that your settings are wrong, you got something backwards, or that you have misdefined MACD in some way..

OldTrader
 
Quote from ZBEAR:

JACK

Guess I gotta buy you a beer huh.
I hope you had a good vacation.

I trade price action - no oscillators .
Categorize me along with Old Trader.

My own inability to find oscillator configurations that worked "well" across the four basic market types,
... ( i.e., balance / transition to trend / trend / transition to balance ), led to frustration with price derivatives, but Not to skepticism as to their potential.
I was frustrated only with my own inability to find any strong useable value in them.

Your recent post on..... MACD < >0.4 addresses a piece of this.
I will work on your many posts, ( old dogs can "TRY" to learn new tricks ).

Thanks Jack.


Iceman1 .... No claim to fame ........ You may stop waiting.
My point is this ...
Don't say something to me that I don't understand,......and then go away.
I might think the worst. ( my problem ).
Unless of course, you come back and clarify things,
.....in which case I eat crow and buy you a beer.
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well Zbear...

since it's all good now... I say we all make some money this week...! :D

Gonna keep an eye on Jack's ideas... which I appreciate his efforts in presenting. But was never one to go exactly by any book anyway; always gonna use some discretion and finesse in most of my trading... at least that's how I usually do it.

However, you gotta stay open-minded. Never know where you might find gold on ET! It's a great community. Just the comaraderie alone oughta be beneficial to any decent trader's results.
Regards,

Iceman:cool:
 
Thanks OldTrader for popping in. Checking my charts/calculations...

-eLindy

Quote from OldTrader:



elindy:

Allow me to jump in here. You are clearly misunderstanding something. I'm looking at the MACD on my 5 minute chart, setting of 5-13-6. On Friday alone there are too many 5 minute readings in excess of either .4 or -.4 to count my friend. That includes every single 5 minute bar from about 9:55 CST to 11:00CST.

My guess is that your settings are wrong, you got something backwards, or that you have misdefined MACD in some way..

OldTrader
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Jack, another suggestion. How about concentrating ONLY on the beginner stuff at first? Provided that the beginner level allows one to make great $, i don't think anyone would object if you limited the discussion to beginner level first. honestly, it's hard enough to understand what you mean talking about "beginner level", that when you bring in "intermediate" and other stuff it's just too much.
 
Quote from elindydotcom:

Unless I'm misunderstanding the term MACD as you use it, my charts show that MACD extremes of 0.4/-0.4 rarely occurs. So, the opportunity for entry into a trade, as defined, rarely occurs. On my charts, many days and sometimes weeks go by without the .4/-.4 extremes being hit.
-eLindy
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Quote from elindydotcom:

Unless I'm misunderstanding the term MACD as you use it, my charts show that MACD extremes of 0.4/-0.4 rarely occurs. So, the opportunity for entry into a trade, as defined, rarely occurs. On my charts, many days and sometimes weeks go by without the .4/-.4 extremes being hit.
More...
Like OldTrader said, you're definitely doing something incorrect. +/- .4 (on the histogram) is hit frequently..
 
...ahh, guys, it's the MACD Histogram that you should be looking at for the +.04/-.04 reading...in other words, the difference between the fast, and the slow lines...or in still other words, the actual "convergence"/"divergence".
 
Quote from tampa:

...ahh, guys, it's the MACD Histogram that you should be looking at for the +.04/-.04 reading...in other words, the difference between the fast, and the slow lines...or in still other words, the actual "convergence"/"divergence".
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Yes, on the histogram. However, it's +/- .4, not .04.
 
Ok - it looks like my data was completely, ummm, messed up to put it mildly. Thanks to everyone that pointed out how completely off the wall my MACD values were. A flush of the TS6 data cache and a reload fixed that. Whew!

I've attached a copy of the revised TS6 code for anyone interested in it.

The rules as implemented for "fast trend" and, as I understand them now are:

  • - Enter long when both the fast and slow line crosses above the overbought level
    - Exit longs when either the fast or slow line crosses below the overbought level - usually the fast line will cross first
    - Enter short when both the fast and slow line crosses below the oversold level
    - Exit short when either the fast or slow line crosses above the oversold level - usually the fast line will cross first
The Filters that are applied are:

  • - Do not enter long unless the MACD Histogram is above the MACDLimit(Default 0.4)
    - Do not enter short unless the MACD Histogramis below the MACDLimit*-1

Unfortunately, with commissions and 1 tick of slippage, the profit is still substantially in the red.

Summary of Results over 2 years: 30.5% profitable trades, .80 profit factor.

Funny - an hour of experimental work turned into a longer endeavour than I planned.

-eLindy
 

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Quote from elindydotcom:


Unfortunately, with commissions and 1 tick of slippage, the profit is still substantially in the red.

Summary of Results over 2 years: 30.5% profitable trades, .80 profit factor.

Funny - an hour of experimental work turned into a longer endeavour than I planned.

-eLindy
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Lindy:

Thanks for running that....that must take some work. My guess is you're not going to be Jack's favorite fellow!

A couple of questions:

1. Do you know how many total trades over the 2 years, how many profitable and unprofitable?

2. What commission factor did you use?

3. Did you assume that trades were held overnight? If so, are you able to tell how overnight trades fared over the 2 years?

Thanks for all the time.

OldTrader
 
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