The Stochastic Indicator

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Folks,

I personally am here to learn how to trade. I have been trading full time for 2 years. I buy books to learn how to trade better. I must say that what Jack is teaching here people pay money for.

I am attracted to his unique style, his confidence and wisdom when he speaks.

Most people will not make it through this thread and will not be ready yet for what Jack is teaching. That driving the car comparison in the earlier thread was a great story. I tend to agree.

Have I learned anything......well yes....I have/am learning to time trends and this is what Jack is teaching us. There are way's to make money in congestion too, but we have a long way to go with this....if we can make it that far...and If Jack will continue.

Traders and traders to be.....This is a pro-trader sharing his knowledge with us....you should bow down....and ask him how high to jump...it is not everyday that we would get such an opportunity.

I do not believe that it is our business what Jack trades...I would venture to say that his net worth is greater than anybody in this thread....well maybe not tampa...:)

I believe Jack is teaching us because he has reached a place in his life and trading career where he can teach and feel good about it. Please do not take this away from him (and me)

Michael B.
 
Everyone,

I am not anti-Jack. I want to learn as well. However, it is impossible to get clear answers from him. For example, after 2 large posts by Jack, I still have no idea what I'm actually supposed to do to practice wash trades. Why is this so? Jack, I want to practice wash trades. What do I do while sitting at my computer? I don't need philosophy. Just tell me what I am physically to do.

Also, maybe I'm a total jerk, but I find it quite annoying when someone says buy when stochastics and macd histogram do this, etc. and you can make $100k or whatever a year per contract. When people try it, they don't get the results and then Jack says, well you need to look at the 1 min chart and volume..oh yeah, and practice wash trades, too. Why didn't he say that before? What will we find out we have to do next?

FRuiTY
 
1. 9:45 stoch(18.18, 20.20) macd hist -1.0 low:866.25 (also low of day)

entered on break of low. red bar green bar drop was a little nerve wracking. the 10:30 bar was a bullish engulfing-type (although light on the vol) bar and 5m macd xo and broke my downtrend channel so i exited. (see chart)

short @ 866.00 9:47
cover @ 860.75 10:34 +5.25

day: +5.25 last 3 days: +9.50

side note: if you reversed long on the macd xo as you exited the rocket you again got a very nice trade - it eventually turned into a rocket. (i think there is a lot of potential in these type entries)

2. 11:05 stoch(77.05, 82.12) macd hist: +1.49 high: 872.50 (also high of day)

never broke the high so NO ENTRY.

side note: the macd xo at 11:30 ended in congestion. also formed a bull flag.

DID NOT TRADE UNTIL AFTER MID DAY

3. 1:15 stoch(96.88, 81.31) macd hist +0.55 high: 875.75 (also high of day)

entered on break of high 876.00. mkt was making new high but macd was not (diverg.) volume was not strong for new highs (especially for new highs of this recent bounce) 1:55 5m macd xo...exited on bounce at 876.75 .

long @ 876.00 1:20
sell @ 876.75 2:00 +0.75

day: +6.00 last 3 days: +10.25

side note: again on the macd xo if you reversed from you rocket this was another good trade as it eventually turned into a rocket.

4. 2:40 stoch(12.00, 24.00) macd hist -0.47 low: 873.25

entered short on the break at 873.00. 2:55 bar had crappy volume and 3:00 was a reversal. 3:05 macd xo exit at 3:12 @ 873.50

short @ 873.00 2:47
cover @ 873.50 3:12 -.50

day: +5.50 last 3 days: +9.75

side note: again if you reversed from you losing rocket in to long at macd xo you had another ok trade as it turns into a potential rocket that doesn't set up.

3:30 had a long signal but it never broke the high so i did not enter

attached is my marked up chart for the day

Has anyone else been looking at the macd xo reversals from rocket endings and failures?
 

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Nice trading, dawg:)

I didn't do as well. I just was not "in the zone" this morning, and when I "got into" it this afternoon, the best I could do was a couple washes (sigh).

admittedly, the war news has me spooked...

Too bad none of this works, and can't be understood.
 
Jack,

I noticed that my MACD Hist numbers and XO points were sometimes noticeably diff than Dawg's. I see now that my data provider (eSignal) has settings for every little piece of the MACD indicator.

Oscillator line : EMA or SMA.
Signal line: EMA or SMA
Source: Close, Open, High, Low, (H+L)/2, (H+L+C)/3, (O+H+L+C)/4

Looking at a simple definition of MACD (Google is so handy), I would surmise that the settings would normally be:

Oscillator line : EMA
Signal line: EMA
Source: Close

Presto, my numbers/XO points now match Dawg's.

I was grimacing about eSignal's "off" defaults, then I realized that I would now sometimes get signals and XO points a bar earlier/later than I used to.

Do you have an opinion on any of these settings? Or am I splitting hairs here since I'm basically in beginner mode?

Thanks in advance
 
Quote from bassocat5:

Jack,

I noticed that my MACD Hist numbers and XO points were sometimes noticeably diff than Dawg's. I see now that my data provider (eSignal) has settings for every little piece of the MACD indicator.

Oscillator line : EMA or SMA.
Signal line: EMA or SMA
Source: Close, Open, High, Low, (H+L)/2, (H+L+C)/3, (O+H+L+C)/4

Looking at a simple definition of MACD (Google is so handy), I would surmise that the settings would normally be:

Oscillator line : EMA
Signal line: EMA
Source: Close

Presto, my numbers/XO points now match Dawg's.

I was grimacing about eSignal's "off" defaults, then I realized that I would now sometimes get signals and XO points a bar earlier/later than I used to.

Do you have an opinion on any of these settings? Or am I splitting hairs here since I'm basically in beginner mode?

Thanks in advance
More...

Matching dawg is most common.

The E of EMA lets change get an edge over non change. This does allow a better signal given the consideration that something is always in the space.

To change the subject, the volume variable is always of a minimum value or greater. This constantly present minimal value is like noise in a system. And the variation above this is signal to you. For price there is similarly something that is always there. We get a better look at the change in price with the E version. Regression stuff is another kind of example of this theme.

When you read the MA of price crowd's viewpoints particularly with reference xo's you can readily see that they usually are throwing large portions of cycle profits in the toilet. A lot of this is lag as it turns out. The C and D of MACD cuts into the lag and furthermore when you get into sequence we will use rate of change of stats to get a "leading" signal.
 
... simulated. I haven't thrown any money at it until I gain enough confidence in the method. Besides, I haven't been doing too well lately ...

I will attempt to trade it in a very simplistic manner, as I didn't have time to read the whole thread and get to the part about fine tuning (got to page 20 or so, will finish it this weekend):

entry as soon as fast line crosses 80 or 20
exit as soon as it crosses back.

Will try to enter on fast moves and avoid ranges.
I have the MACD up but I'm only watching it.

The first cross (of the 20) occurred before the open, so I stayed this one out as it looked choppy too.

Entry: cross above 80 at 10:55 @ 1065.50
Exit: at cross below 80 at 11:03 @ 1073.50
for +8.00.

Fast line crossed back up on the next bar but didn't enter as pace had slowed down. MACD didn't cross the whole time, diff was greater that 1 at all times.
Then I had to go to work :mad:

Nice going dawg, I wish mine were real too.

ElectricTrader, I agree with you. Lately there's been too much anger and bashing on these boards.

Good trading to all.
 

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Quote from dawg:

1. 9:45 stoch(18.18, 20.20) macd hist -1.0 low:866.25 (also low of day)

entered on break of low. red bar green bar drop was a little nerve wracking. the 10:30 bar was a bullish engulfing-type (although light on the vol) bar and 5m macd xo and broke my downtrend channel so i exited. (see chart)

short @ 866.00 9:47
cover @ 860.75 10:34 +5.25
More...

Dawg, I understood your methodology to be to not enter a trade until there has been a breach of the 5 min. signal bar, which is the method I would use as well to confirm the strength of the trend.

Looking at the 9:40 bar, I see stoch. of 31 and 35, which would not be an entry signal beneath its low. The 9:45 bar does provide the proper stoch signals, and I thought you would have entered upon the breach of that low, which would still have been a good trade. So, was this just the quarterback calling an audible at the line of scrimmage? If so, nice call. Or, am I misunderstanding your methods?
 
i attached a picture of my chart and see on the info bar....are you using all settings? i checked another chart under all settings and it read 33,37....i don't use all setting (although i have it on another chart)...this is definitely a question i don't have a clue about....to use all settings or not....if you aren't and our setting still don't agree then i am throwing the computer out the window.

here is my reasoning:
i just assumed we were looking at the non-alll settings and by waiting the 15 minutes for the 'synch up' trading off the non-all settings is fine....we waited 15m becuase of the gaps between the charts and stuff.


:eek:
 

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1. 9:45 stoch(18.18, 20.20) macd hist -1.0 low:866.25 (also low of day)

that should read 9:40 and not 9:45 also. sorry.
 
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