The Stochastic Indicator

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Thanks. your last post is very helpfull, there were a couple things you said that i hadn't thought about.

one question the initial long at (996?) was that your first trade of the day? why did you take it - was it out of anticipation of the rocket? if so why didn't you try a short before (around 9:45)?

thanks
 
Quote from dawg:


quick side comment: at some point you will be getting into trades before they become rockets. for ex:good macd hist reading +.40 and stoch crosses 50...so in essence you will be taking every rocket b/c you are already in the trade. i always reverse out of failed rocket.

today that was 1005 area...right where we bounced/sideways...just monitor the action here don't panic...is vol drying..vol increasing upwards...let the bars close and monitor.

rocket is still there...forms a bear flag which b/d into anothe price/vol spike and here we get a 5m macd divg...trend over/mkt bottom...look to reverse if still short on the rocket ending.

here is how i look at it:

rocket fails-->macd xo-->crosses 50-->rocket

hope this helps. this is how i played it.
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thanks Dawg, def helps. My problem is that i usually get the failed roccket reverse but dont knwo where to exit once it goes my way. This post def helped clear up what i should be looking for next.

especially the macd xo-->crosees 50-->rocket.

I also look to get in before the rocket forms. I got in the long rocket prematurely at 106.5 and exited at 108.5 when it broke my right side of the channel along with the divergence of the stoch. If i had gotten short on the reversal, i would have stayed short only until the stoch bounced off 50% and was forming a point 3.

i think from now on i will look for continuation and point 3 after the failed rocket reverse. If the failed rocket reverse ends up being a wash after it hits 50 % line, then we are in a slow uptrend or lateral trend. IF this is the case, i think we would probably end up slaloming for a little while.

anyway, thanks for the help and I am glad to hear you are having a good day.


jc
 
Quote from CrescitEundo:

Thanks. your last post is very helpfull, there were a couple things you said that i hadn't thought about.

one question the initial long at (996?) was that your first trade of the day? why did you take it - was it out of anticipation of the rocket? if so why didn't you try a short before?
More...

here are all my trades for today, so i did try a short early in the day...i got long on the pullback of the hod b/o...looking for it to turn into a rocket...i had the mkt brakceted after my intial short failed.

1. lod b/d
short: 1003.00
cover: 1005.25 –2.25

2. hod b/o
long: 1006.00
sell: 1008.00 +2.00

3. rocket failure reversal
short: 1007.50
cover: 1000.50 +7.00

4. macd divg rocket end reversal
long: 999.00
sell: 999.50 +0.50
 
Member

Registered: Feb 2003
Posts: 81


07-09-03 01:29 PM
simple up grade for you
If you stay focused, you will notice how your stop effort is flowing.

Do this:

Keep a log on the stops that may be possible in between the ones you actually use.

Note for yourself how frequently you already C&R.

If you can use your available monitoring time this way, then you are ready to "double down".

In using a method like you are, you rightly constrain your playing time during high volume periods only.

High volume periods are rich with opportunity if you are disciplined.

As you both notice, you have chosen profit targets that net you 3 to 4 trades a week at a 10 point level. This is NAS points. 30 to 40 points a week can be divided into your capital and you sen in the near term multiplesof capital occurring. This grants you the right to do more than 1 contract.

It also grants you something else.

Ifyou looked for other signals, you would see them. Once you see them, then you have the right tocontinue to add to your skill base and make your money velocity higher.

At this stage of performance no matter what you do, you usually double your take. These are easy stages of learning to be more efficient.

What you may see is that the trades you didn't get 10 points on are trades that you CAN get 10 points on. Two 5's is there and you are earning the right to take the two 5's.

The signal you need to decide to go into a Two 5's mode is not being observed as yet. Itis actually the signal you are getting saying you won't make the 10 points.

You need to consider my comments for the simple reason that you can know ahead of not making the 10 points thatyou are not going to.

In the 4 weeks you are devoting to getting theright to do two contracts, also consider giving yourself a sereis of rights which each time you do, you "double down" on profits.

Obviously the rules of the first post are not the only set of this kind. anyone using a set that gets similar results, can do"doubling down". The thread reapidly shiftedawayfrom the inital rules to theconsideration of 30 to 40 points a week.

Look closely if you will.

You see that your stop process is working one way or another usually. The 10 point reward way or not the 10 point reward way. As yyou get the signal (I will give it to you in detail later) that thee is no 10 point profit ahead, you need to do something to always be on the "right" side of the trade. By making the first 5 of the "Two 5's" and seeing that there isno 10 point run going to happen, you need to reverse your 1 contract and ride back down to your initial entry. All of this takes the same amount of time as the10point run.

If you develop the discipline to log and C&R stops, you will find that you experience the fact that you can't log nor C&R about half the time. You do the reversal when you can't log.

This will run your weekly take up to 60 to 80 points a week.

The next "double down" is to recognize that you can usually do TWO "Two 5's" in sequence.

lets focus on the signal. you say how you get stops. It is afair way but not an excellent way. Stay with what you do. Notice you have gaps usually in the use of your time. that is okay too but it does trap you once in a while because of attention span difficulties. You pull stop C&R values according to time passing more than micro formations occurring. When you drawablank at the moment you expect a value for processing, you are experiencing the signal. It is a failure to get data in a timely manner. I humorously refer to it as a fog horn not going off when it is foggy. naturally the light house keeper awakens and says: "What wasn't that?" you are looking for whatdoesn't happen to keep you on the path to 10 points. when it doesn't happen is when you reverse and then take the 5 points and do the stop process down to the intial entry value.

As guts would have it, you can repeat this usually if the volume range of values continues AND DOES NOT DROP OFF ANY.

Have fun.
 
Quote from dawg:



here are all my trades for today, so i did try a short early in the day...i got long on the pullback of the hod b/o...looking for it to turn into a rocket...i had the mkt brakceted after my intial short failed.

1. lod b/d
short: 1003.00
cover: 1005.25 –2.25

2. hod b/o
long: 1006.00
sell: 1008.00 +2.00

3. rocket failure reversal
short: 1007.50
cover: 1000.50 +7.00

4. macd divg rocket end reversal
long: 999.00
sell: 999.50 +0.50
More...

Good work. The last few pages are terrific.

Bubba7 machine will post a related item vis a vis the thread: Day trading BO's inthe ES/NQ. Post is entitled: simple upgrade for you. It is a reversal strategy spliced into a mechanical system. See below.
 
Quote from jack hershey:



Good work. The last few pages are terrific.

Bubba7 machine will post a related item vis a vis the thread: Day trading BO's inthe ES/NQ. Post is entitled: simple upgrade for you. It is a reversal strategy spliced into a mechanical system. See below.
More...

Oops the posts arrived in opposite order.
 
What is a rocket? Rocket is not a breakout, because breakout good be one bar, but rocket is multiple bars including a breakout.

Now, many people enter immediately after a breakout or some wait for retracement to see others supporting that breakout.

Rocket other hand you see people have taken position before you in one minute or 5 minute period chart, and driven price to overbought condition (calculated by stoch and macd, etc). So, your expectation is rocket would continue in a steep angle (you decide which slope is a rocket), but if rocket fails, which happen many times; you do wash trade or take a small loss. I mean, if it is a rocket, money velocity should continue not stall (that is where practice comes handy with log).

I do not take reversal with all failed rockets, there are criteria. After a wash or small loss, wait for a breakout bar with increase or dryup in volume. This is not a mechanical trading system, part of it discretionary. Only, through practice and experience plus keeping notes of your trading can make you a better trader (also, you need enough funds to survive, when you are in drawdown, and everybody goes through drawdown).

Certain time of the day, like early morning for rocket, then mid morning for reversal, no trade in lunch hours, then again in the evening look for rocket.

Also, subcribe to live news service for protection. Keeping your funds intact year after year is more important than big wins. That way you can battle another day. Good Trading.
 
This is my annotated chart.

The MA ribbon is my innovation, call it a security blanket.

I can see where the rocket and volume will keep me out of lateral trend that is going nowhere.

I changed the stochastics lines to 50. It works much better for me, thanks for the suggestion!

If I am messing up anywhere, please feel free to show me.

Thanks:)
 

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Thanks Jack for that last post. I think it helps a lot with the questions i had regarding the failed rocket reverse trade. I am going to take a shot at the difference bewteen two 5's and one 10. Usually after the failed rocket, the stochs go to 50%. At this point the volume dies and there is a small pullback. Following the low volume pullback, their can be 2 things; volume resumes back to trend volume and price returns back into the original direction(one 10) or volume resumes back to trend volume and price continues its retrace(two 5's) warranting a reverse. This is just a guess.



jc
 
sateady as we go on this one. we are hitting both sides of the channel on this one.

For those in the cross channel groove, keep in mind the frequency of the moves.

Intermediates can go out to a slower fractal where it is tapping and just read the indicator signal sequences there.
 
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