The Stochastic Indicator
- Thread starter jack hershey
- Start date
- Status
3 trades so far today based on intrabar signals on 5 min chart:
09:50 Long 881.75 exit 09:53 879.75 -2
10:17 Short 874.50 exit 10:20 875.50 -1
10:28 Short 873.50 exit 10:29 875.50 -2
In the first case, both 14,1,3 stoch lines were above 80, macd histogram > 0.4 and macd >1.
In the two short trades, both 14,1,3 stoch lines were below 20, macd histogram < -0.4 and macd < -1.
From the attached chart, it is clear that these were all false signals as they no longer existed after each bar closed.
The opportunity to wash out at zero loss didn't present itself. Any comments would be welcome.
David
09:50 Long 881.75 exit 09:53 879.75 -2
10:17 Short 874.50 exit 10:20 875.50 -1
10:28 Short 873.50 exit 10:29 875.50 -2
In the first case, both 14,1,3 stoch lines were above 80, macd histogram > 0.4 and macd >1.
In the two short trades, both 14,1,3 stoch lines were below 20, macd histogram < -0.4 and macd < -1.
From the attached chart, it is clear that these were all false signals as they no longer existed after each bar closed.
The opportunity to wash out at zero loss didn't present itself. Any comments would be welcome.
David
----------------------------------------------------------------------------------
wash trades
3 trades so far today based on intrabar signals on 5 min chart:
09:50 Long 881.75 exit 09:53 879.75 -2
10:17 Short 874.50 exit 10:20 875.50 -1
10:28 Short 873.50 exit 10:29 875.50 -2
In the first case, both 14,1,3 stoch lines were above 80, macd histogram > 0.4 and macd >1.
In the two short trades, both 14,1,3 stoch lines were below 20, macd histogram < -0.4 and macd < -1.
From the attached chart, it is clear that these were all false signals as they no longer existed after each bar closed.
The opportunity to wash out at zero loss didn't present itself. Any comments would be welcome.
----------------------------------------------------------------------------------
Hello dkm,
Very good post. And point well taken. If I use just the indicators âhistogramâ and âstocâ as my only set of signals and in a mechanical way, there are days when they work like clockwork. And there are days when I get burned.
If I may put in my two cents here. This reply is not meant to be condescending as Iâm sure what I post is obvious to you (Also I have benefited greatly from your postings and work elsewhere and look forward to learning with and from you in the future).
What helps me is to view the whole terrain. Which means expanding my indicator set. But isnât that what this approach is all about? (1st level stoc/histogram, 2nd level points/trends/channels, 3rd level 1 min vol dus, b.o.(p,m,v), etc etc etc) Yesterday closed down as a rocket. Today opened gap up. That gives me consideration to pause. Better be a strong bounce to continue? Sync occurred early 9:35am (or at least cash/futs moving in tandem). 1st attempt to close gap (60%) at 9:40am. At 9:50 sectors of market map checkered. While tech and industrial in the red others such as financial, energy, utilities are in the green or neutral. The large histogram values at the opening were due to the gap. Looking at the continuing histogram values forces me to take a look at the 1 minute chart. I see only one nice trend price bar with volume at 9:43. A potential pt#1 setup on the 1 minute. A failure for pt#3 at 9:47 and 9:50, of which have no obvious enhancing trend volume. Simultaneously NQ has a very crude fbp developing. The 1 minute macd is at a xovr point.
At 10:17 a lot has just happened. The 5 minute chart has a mini tape developing for the last 5 bars . We have closed the gap and are hitting support at ~ yesterdaysâ close. On the 1 minute at 10:17 Iâm hitting my rt line of which I have been in the channel drawn since 9:50. We have closed the gap and are hitting critical support at ~ yesterdaysâ close. Is this a bit late to consider entering a position? (hitting rt line on 1 min, almost closed gap, support line coming up) That gives me consideration to pause. Even though my indicators are just starting to turn on with stoc and histogram here. Oddly enough at this point the 1 minute macd has only been entwining while the 5 min macd has been diverging.
At 10:28 a lot is going on. Iâve broken out of the rt line drawn on 1 minute chart, retraced, then retesting the support level of the previous channelsâ trough. Volume does increase as I break this support level only to bounce off of yesterdaysâ close which was the loy. A nice mini ftp follows. Again, a little late for entry even though my stoc and histogram are turning on?
The short answer is using only two indicators in a mechanical approach does not always work for me. And if I do use only these two then I look for signs of a strong trend. (At the very least this translates to not having a hair trigger as soon as indicator goes on) Maybe today was a day for slaloming which is well beyond me. There are nuances I am trying to learn which I have not grasped yet and may never (lol).
It is easy to comment on things in hindsight and nobody hates a Monday morning football quarterback more than myself. I donât have the insight I wish I did in the heat of the moment. I still canât and donât trade live. Definitely not! And I have my own (deeply rooted) psychological barriers to overcome. Yet it is such a pleasure to go down this road, where it will lead is a total mystery to me.
wash trades
3 trades so far today based on intrabar signals on 5 min chart:
09:50 Long 881.75 exit 09:53 879.75 -2
10:17 Short 874.50 exit 10:20 875.50 -1
10:28 Short 873.50 exit 10:29 875.50 -2
In the first case, both 14,1,3 stoch lines were above 80, macd histogram > 0.4 and macd >1.
In the two short trades, both 14,1,3 stoch lines were below 20, macd histogram < -0.4 and macd < -1.
From the attached chart, it is clear that these were all false signals as they no longer existed after each bar closed.
The opportunity to wash out at zero loss didn't present itself. Any comments would be welcome.
----------------------------------------------------------------------------------
Hello dkm,
Very good post. And point well taken. If I use just the indicators âhistogramâ and âstocâ as my only set of signals and in a mechanical way, there are days when they work like clockwork. And there are days when I get burned.
If I may put in my two cents here. This reply is not meant to be condescending as Iâm sure what I post is obvious to you (Also I have benefited greatly from your postings and work elsewhere and look forward to learning with and from you in the future).
What helps me is to view the whole terrain. Which means expanding my indicator set. But isnât that what this approach is all about? (1st level stoc/histogram, 2nd level points/trends/channels, 3rd level 1 min vol dus, b.o.(p,m,v), etc etc etc) Yesterday closed down as a rocket. Today opened gap up. That gives me consideration to pause. Better be a strong bounce to continue? Sync occurred early 9:35am (or at least cash/futs moving in tandem). 1st attempt to close gap (60%) at 9:40am. At 9:50 sectors of market map checkered. While tech and industrial in the red others such as financial, energy, utilities are in the green or neutral. The large histogram values at the opening were due to the gap. Looking at the continuing histogram values forces me to take a look at the 1 minute chart. I see only one nice trend price bar with volume at 9:43. A potential pt#1 setup on the 1 minute. A failure for pt#3 at 9:47 and 9:50, of which have no obvious enhancing trend volume. Simultaneously NQ has a very crude fbp developing. The 1 minute macd is at a xovr point.
At 10:17 a lot has just happened. The 5 minute chart has a mini tape developing for the last 5 bars . We have closed the gap and are hitting support at ~ yesterdaysâ close. On the 1 minute at 10:17 Iâm hitting my rt line of which I have been in the channel drawn since 9:50. We have closed the gap and are hitting critical support at ~ yesterdaysâ close. Is this a bit late to consider entering a position? (hitting rt line on 1 min, almost closed gap, support line coming up) That gives me consideration to pause. Even though my indicators are just starting to turn on with stoc and histogram here. Oddly enough at this point the 1 minute macd has only been entwining while the 5 min macd has been diverging.
At 10:28 a lot is going on. Iâve broken out of the rt line drawn on 1 minute chart, retraced, then retesting the support level of the previous channelsâ trough. Volume does increase as I break this support level only to bounce off of yesterdaysâ close which was the loy. A nice mini ftp follows. Again, a little late for entry even though my stoc and histogram are turning on?
The short answer is using only two indicators in a mechanical approach does not always work for me. And if I do use only these two then I look for signs of a strong trend. (At the very least this translates to not having a hair trigger as soon as indicator goes on) Maybe today was a day for slaloming which is well beyond me. There are nuances I am trying to learn which I have not grasped yet and may never (lol).
It is easy to comment on things in hindsight and nobody hates a Monday morning football quarterback more than myself. I donât have the insight I wish I did in the heat of the moment. I still canât and donât trade live. Definitely not! And I have my own (deeply rooted) psychological barriers to overcome. Yet it is such a pleasure to go down this road, where it will lead is a total mystery to me.
Quote from colina:
Balls of steel helps
Hardly, I think it depends on the risk tolerance level and what one thinks the mkt will do next. If they think it will reverse, they will see all the signs in favor of reversal and ignore the ones that tell them it's only a correction, and viceversa. It's in the eye of the beholder.
FWIW, here are my trades for Thu since I have the annotated chart saved. Last night I had to do something for work which took me till after midnight so today I couldn't get up to trade. Bringing work home sucks
... unless you're trading.Classic example of NOT sitting on your hands when you oughtta. Fortunately I didn't hurt myself too bad [on paper].
#1 rocket signal and volume spike on bar down on 1 min
Short 9:59 877.50
Cover 10:03 877.75 rocket failed and reverse.
-0.25
#2 reversal - failed rocket, 5m MACD converging
Long 10:03 877.75
Sell 10:09 877.75 washed it as I was unsure of the signals.
0.00
#3 inside bar rocket signal (fast line above 80, MACD >+0.4 diverging nicely). Didn't see up volume declining on 5m before entry.
Long 10:46 880.50
Sell 10:53 879.00 no rocket, channel broken. Slow execution.
-1.50
#4 reversal - failed rocket, 5m MACD crossing down, 1 min already xed.
Short 10:54 878.75
Cover 11:03 879.50 washed it. 5m MACD entwined at 0, recognized convergence - ftp forming.
-0.25
#5 VDU breakdown, entry below low of 11:15 inside VDU bar
Short 11:21 879.00
Cover 11:23 879.00 washed it as volume failed to rise above 5k.
0.00
#6 rocket signal 5 min later, this time breakdown was for real
Short 11:29 878.00
Cover 11:55 877.00 5m MACD x up -> fast line out -> channel broken.
+1.00
Day -1.00 (6 trades comm -1 pt.)
Was looking too much at 1 min chart and missed the big picture = consolidation day, lots of chop. Also moving ahead too soon.
Week +15.00 (13 trades comm -2.50 pt)
Net +12.50
Quote from vorzo:
Hardly, I think it depends on the risk tolerance level and what one thinks the mkt will do next. If they think it will reverse, they will see all the signs in favor of reversal and ignore the ones that tell them it's only a correction, and viceversa. It's in the eye of the beholder.
FWIW, here are my trades for Thu since I have the annotated chart saved. Last night I had to do something for work which took me till after midnight so today I couldn't get up to trade. Bringing work home sucks
Classic example of NOT sitting on your hands when you oughtta. Fortunately I didn't hurt myself too bad [on paper].
#1 rocket signal and volume spike on bar down on 1 min
Short 9:59 877.50
Cover 10:03 877.75 rocket failed and reverse.
-0.25
#2 reversal - failed rocket, 5m MACD converging
Long 10:03 877.75
Sell 10:09 877.75 washed it as I was unsure of the signals.
0.00
#3 inside bar rocket signal (fast line above 80, MACD >+0.4 diverging nicely). Didn't see up volume declining on 5m before entry.
Long 10:46 880.50
Sell 10:53 879.00 no rocket, channel broken. Slow execution.
-1.50
#4 reversal - failed rocket, 5m MACD crossing down, 1 min already xed.
Short 10:54 878.75
Cover 11:03 879.50 washed it. 5m MACD entwined at 0, recognized convergence - ftp forming.
-0.25
#5 VDU breakdown, entry below low of 11:15 inside VDU bar
Short 11:21 879.00
Cover 11:23 879.00 washed it as volume failed to rise above 5k.
0.00
#6 rocket signal 5 min later, this time breakdown was for real
Short 11:29 878.00
Cover 11:55 877.00 5m MACD x up -> fast line out -> channel broken.
+1.00
Day -1.00 (6 trades comm -1 pt.)
Was looking too much at 1 min chart and missed the big picture = consolidation day, lots of chop. Also moving ahead too soon.
Week +15.00 (13 trades comm -2.50 pt)
Net +12.50
How about just following the WL script signals? ( That would be less stressful than having to "think" what the mkt will do next.)
pretzel
- Status