The Stochastic Indicator

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Quote from lcl_1:

Jack:

It would be very helpful if you would add a few real time, or, as close to real time, chart examples of your written explanations to the trading journal.

Thanks for the opportunity to learn from your methods.

:)
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Iam going to proceed on this. I am practicing already.

since we are coming off the right side of an IT channel (fri, mon ,tues) I am going to get us in context first.
Today I posted a quick rundown on the day's stuff for three levels of people.

As a small departure I am going to post expert stuff occassionally so people can see where they will wind up soon. These posts will be up in almost real time. there is a 60 sec limitation between posts so I will be popping them in from two machines to halve that stuff.

At first I am going to get you in a place where no matter what level of waelth you have created, you can keep the beat. a person cannot skip steps in this learning process. they will be kidding themsleves about their emotional make up and what they really learn is FEAR. I try very hard to not get people into that.

One thing I will have to do as part of the expert trading is go out ahead of the market 5 to 15 minutes. by doing this and you going with me, you see that this is where you will mostly be operating.

So look for continuing posts as an expert trading. I will annotate in between by kicking in mini charts from my other machine. I will say when I am out ahead fo the market.

If you were around a while back you saw be trade the commodities running through a head and shoulders then a super whipsaw period were I cremed it. remember there some people could never understand it. I will work very hard to be focussed. clear, crisp and backing it with visuals.
 
summation of 7/1 trades
10:01 (spy 96.94) shorted the number rode down into a rocket, i was using data that included the overnight otherwise i proboly would have been short a lot earlier held to long despite having 'felt' the botom. Had i seen the continuation from the day before better i probably would have been looking at it differently (cover 10:12 @96.76)

11:30 took a wash looking for a rocket
11:55 washed looking for it to break back up into a rocket

12:57 long 96.99 – change modus, failed downside rocket, price rising on increasing volume good buy, coverered 1:37 at 95.45 because didn't make it across my trend channel tried reversing (for a loss)
2:20 long 97.54 volume break out back into a rocket closed at 2:38 only to restablish 22 cents higher, I thought it was breaking down on increasing volume, oops. Cover 3:35 @ 98.40 thought we were in consolodation.

I definitely have a lot to work on but my best day as of yet up 124 cents in the SPYs.

in retrospect I saw we were in change mode but it took a while before i could see the enty signals, I got burned for a while (a couple weeks ago) playing breakouts but as of late have been able to 'see' them a lot sooner, its kewl


THANK YOU Jack and I can't wait to watch you
 
hi,

I am proceeding with trying to learn as much about your trading system as I can. I think that you are waiting either for the market to show something, or for us to figure something else out. I was hoping you could advise me how to proceed. I think that my next step is to see the market paces a little better. This I believe means keeping a stop log, which I am confused about because i have never used stops before (i infact didn't have them untill about 2 weeks ago). thank you agian for your time. also if the answer is that i need to watch the market more, just tell me to shut up and trade.

thanks again for your time

today i spent a lot of time practicing washing and paying a lot of attention to the P/V relationship on a micro level, it was fun but i was looking forward to you posting
 
One trade for me today, small profit, huge lesson. I"m trading SPY in small size to help keep the emotion out, so my prices are for that instrument, sorry about that. I do watch the ES for actual trigger points though.

I'm antsy, so made early entry at 9:37, 98.79. Bias for today was long, small gap quickly filled and turned around. Stochastics were entwined from yesterday above 80, so I went long after the high of the 9:30 bar was broke.

Now, here's the neat part: 9:55 bar is high momentum on increasing volume. Next bar (10:00) I immediately noticed volume charging up on lower prices ( pro rata as Jack puts it). I got out at 99.08.

I'm finding using volume to be wildly useful. Side note: 10 o'clock bar is often a reversal bar at least to some extent.

I've noticed several times that these early morning entries carrying thruogh from prior day don't have MACD reading high enough, but I take them because they seem to work.
 
if anyone else is having problems with the stop log there is a good discusion on page 77 and 78 of this thread.

bundlemaker,
its neat when you start to see the 'pro rata' volume, I was playing with that yesterday as well
 
jack

been trying to get to the next level by incorporating a faster fractal...my biggest problem is trying to determine whether something is a reversal or a point 2-3 channel traverse...should i just be looking at volume as the driver?...for ex in the attached chart mkt traverses on lower vol...macd halts at 0 line...i have been looking out for divg macd xo with price for reversal areas....any comments on this and the attached chart are appreciated. thanks

i know this day was pretty straight forward and almost fit the method to a T. I try and visualize this action and use it as a guide when trading.

i also agree that a discussion on the sop log would be of great benefit...prob allow us to hand the channel traverse much better....

everyone have a great holdiay.
 

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Quote from jack hershey:



As the money velocity slows you are coming into a tack. when the tacks have the same spacing (they will) you are grooving making money.

This is different than most methods. You are getting depth here as well as a breadth you deserve by now. So take deep breadths. Association works.
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On thursday, As I was C&R, I noticed something very cool that you are refering too in terms of tacks having the same spacing. It seemed that the perfect time for reversing was 5 min(peaks occuring every 10 minutes). It seemed that their was constant spacing in terms of time and peaks. I think that this may be what you always talk about when referring to A/D. The range of prices was changing while the horizontal spacing of time was the same.
I think adding horizontal stops(time) def heps in adding to the breadth and depth category.

next step is too make sequences in these different peak paces and how they change.

jc
 
When Jack says, "important values in formations", is that essentially referring to pivot points. If not, I'm missing something.

Also, I'm a bit confused about which fractal to watch for the stop log. In one place Jack states, "make log from the fractal you trade", which to me means the 5min. In another spot he says to,"use the next faster fractal", meaning the 1min. Can anyone clear this up.

Frankly, I"m still a bit stumped about the whole stop log thing. How is this different from just running a trailing stop 1 or 2 pivot points back. Am I missing somthing important?
 
Quote from dawg:


i also agree that a discussion on the sop log would be of great benefit...prob allow us to hand the channel traverse much better....
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dawg,

I'll take a stab at it. My take is that the actual stops we are placing through C&R are used for protection from unexpected events (such as today's selloff) rather than to take us out of trades when market conditions change. The pace for doing C&R is directly related to market pace - for a trend, it's the time between two peaks or troughs.

The recording of stops, on the other hand, can put you on guard when things are about to change. If you can no longer add new values to the log after one C&R interval (or the time it took the market to make two troughs/peaks), then the trend might come end. If you also get flaws in sequences, it's time to get out.

I'm still unsure about what formations to use for stops - see Jack's example from a post on page 79. These formations would obviously differ between 1m and 5m fractals.

Jack, can you shed some light on this.

Thanks,
vorzo
 

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