Stochastics question

[NewTrade]

Hi everyone.

I am learning stochastic trading but have come across a few things I need clarified.

Why is it on some tutorials people look for the beginning of a downtrend to make their entry? For equities this makes no sense. Perhaps they are trading something else such as FOREX?

 

[tech/a]

Think its out of context if its for the long side.
It its for the short side then it would make sense.
Can you point to the tutorial
or an extract.

 

[NewTrade]

http://www.youtube.com/watch?v=88n-a3rUmJQ (This is the Tutorial)

Tech, silly question, but what do they mean by going in long and short? I couldn't find the answer all night last night...

 

[tech/a]

Had a look.
I think your mis understanding the explanation.

Long----Market to trend up
Short----Market to trend down.

For what its worth Oscillators (Any) in my view are only of value in systems design.
If your trading in a discretionary manner then they are too slow.Best used in conjunction with other indicators which AREN'T oscillator based.

The video was very basic and missed quite a few points with regard to proper use.
But a good intro.

Watch a few VSA Videos if your into discretionary trading.
The best form of instant analysis and chart reading skills Ive found in 17 yrs.

 

[NewTrade]

Had a look.
I think your mis understanding the explanation.

Long----Market to trend up
Short----Market to trend down.

For what its worth Oscillators (Any) in my view are only of value in systems design.
If your trading in a discretionary manner then they are too slow.Best used in conjunction with other indicators which AREN'T oscillator based.

The video was very basic and missed quite a few points with regard to proper use.
But a good intro.

Watch a few VSA Videos if your into discretionary trading.
The best form of instant analysis and chart reading skills Ive found in 17 yrs.

Thank you and I will queue that in for my nightly viewing - thanks very much for the tip and explination.

 

[MrMomentum]

Hi everyone.

I am learning stochastic trading but have come across a few things I need clarified.

Why is it on some tutorials people look for the beginning of a downtrend to make their entry? For equities this makes no sense. Perhaps they are trading something else such as FOREX?

Hi NewTrade,

I like to analyse charts.

I personally don't like using indicators.

Of all the indicators I've looked at, I think I dislike the stochastic the most.

I feel that it gives me too many signals to enter and exit.

If you work out a way to make the stochastic work please let me know.

 

[tech/a]

With confirmation from other analysis it can work well.

Here is a trade (SPI)I completed not 10 mins ago.

CLICK TO EXPAND


This is a 1 minute chart Stochastic is 10 period.

 

[wayneL]

With confirmation from other analysis it can work well.

Here is a trade (SPI)I completed not 10 mins ago.

CLICK TO EXPAND
View attachment 44113

This is a 1 minute chart Stochastic is 10 period.

Tech you should be demanding $97... no, $7 for this information. :

 

[tech/a]

Yeh good point
It'll be up for sale in a few days!

 

[NewTrade]

I can see some good entry points in there that I would have gladly taken myself. Correct me if I am wrong but you entered at the beginning of an uptrend where the stochastic indicator showed an increase in buys and little supply? I woulnd't mind seeing the moving average on that chart too.

MrMomentum; I have seen that it is best to avoid mid range crosses as indicators and focus the use of stochastics only to the heavily sold/heavily bought signals.

 

[tech/a]

I can see some good entry points in there that I would have gladly taken myself. Correct me if I am wrong but you entered at the beginning of an uptrend where the stochastic indicator showed an increase in buys and little supply? I woulnd't mind seeing the moving average on that chart too.

No Stochastic ONLY indicated Oversold.
VSA showed me clearly supply and lack of Supply---it takes a few years to know when how and what to look for.An M/A is of no use what so ever.

MrMomentum; I have seen that it is best to avoid mid range crosses as indicators and focus the use of stochastics only to the heavily sold/heavily bought signals.

Actually I don't rely on stochastics predominantly - I look at 3 line moving averages, MACD, Volume and stochastics. I use all the indicators to back up any theory I may have about the market - attempting to determine false signals.

Enjoy your journey---in a few years youll at least know
"What you dont need to know"

 

[NewTrade]

No Stochastic ONLY indicated Oversold.
VSA showed me clearly supply and lack of Supply---it takes a few years to know when how and what to look for.An M/A is of no use what so ever.



Enjoy your journey---in a few years youll at least know
"What you dont need to know"

Oh, I made an error - I meant to say heavy selling not heavy buying; silly me.

Thank you; I will enjoy the ride.

 

[tminus]

View attachment 44113

This is a 1 minute chart Stochastic is 10 period.

I just started using IB, but they don't offer volume on Indexes like in your attachment. I also don't see volume on Google Finance for indexes. Is there a way of seeing this.
Thanks

 

[tech/a]

I just started using IB, but they don't offer volume on Indexes like in your attachment. I also don't see volume on Google Finance for indexes. Is there a way of seeing this.
Thanks

E Signal is my realtime data provider
The software is Tradeguider realtime.

 

[tminus]

E Signal is my realtime data provider
The software is Tradeguider realtime.

Thanks I will look into ESignal

 

[Lone Wolf]

Apologies for being a bit off topic, but relevant to the posts on IB volume.

As an interesting comparison, attached is a Tech's chart compared to the September SPI contract. Volumes mostly follow. But they aren't the same. For example, look at the volumes around Tech's exit point. On the AP chart the volume increases steadily then suddenly drops to very low. Whereas the SPI, while similar, isn't so well defined.

But massive vol is still massive and very low vol is still very low.

 

[skyQuake]

Apologies for being a bit off topic, but relevant to the posts on IB volume.

As an interesting comparison, attached is a Tech's chart compared to the September SPI contract. Volumes mostly follow. But they aren't the same. For example, look at the volumes around Tech's exit point. On the AP chart the volume increases steadily then suddenly drops to very low. Whereas the SPI, while similar, isn't so well defined.

But massive vol is still massive and very low vol is still very low.

tech's data is correct. I remember there was something in the IB thread about incorrect open & close values for bars, as well as incorrect volume.

 

[Lone Wolf]

tech's data is correct. I remember there was something in the IB thread about incorrect open & close values for bars, as well as incorrect volume.

Really? I was just comparing the difference between Tech's AP index and the SPI futures contract. I didn't know one was wrong, just different. You say IB shows incorrect data for futures contracts? That makes me very sad.

I'll go see what I can find, thanks for the input.

 

[MrMomentum]

Hi All,

I’m looking at that chart you all keep referring to.

If I remove the stochastic and the volume indicators and just focus on the price action of the chart, I see a long entry based on a broken downtrend.

Is this too simplistic?

The stochastic divergence signal would probably have made me more tentative.

I’d find myself asking questions like “If there is no stochastic divergence does that mean I don’t enter.”

I like to analyse charts on there own without indicators.

To me the use of indicators add an unnecessary level of confusion.

 

[tech/a]

To me the use of indicators add an unnecessary level of confusion.

Dont use them then.
The question was about a basic stochastic
My reply was in respect to yours
Looking for a way that stochastic could work.
Though I had shown that.