Bollinger Bands & Stochastics

Discussion in 'Trading' started by larrybf, Nov 9, 2001.

  1. I have been using stochastics slow (14,3) with bollinger bands to daytrade the eminis. Since stochastics was my first successful approach to the market I have always had a preference towards it. However upon recent review of my trading and charts I keepm noticing that BB seems to give a clear view of market action. For those of yopuy that use both indicators i would like to know which of these two indicators you prefer and why. THANKS.
  2. Magna

    Magna Administrator


    The truth is that either indicator will do the job, the trick is to stick with one and learn it inside out. Ultimately it will be a personal preference as some people just "see" things better with one over the other.
  3. both are totally useless for daytrading.
  4. BSAM



    I jest GOTTA disagree with that.

  5. Larry,

    I don't "jest" :)

    Also, I dont disagree or agree i.e. you can trade with or without indicators.

    If you decide to use indicators, I simply say that indicators are only part of a VERY big story... as you progress down the road of trading, you will get to understand what I am saying. Moreover, if your journey into trading has failed to bring such understanding within a year or so down the road, you most probably will no longer be trading. So, begin your journey with wisdom and in a humble manner... seek knowledge, introspect, and learn from your mistakes and victories. Trading is a circle of ambiguities and contradictions. When you first start, all will seem crystal clear. As you progress around the circle, things will become depressing and potentially desperate. With determination and discipline you should be able transform elements of your desperation and depression into profit and a humbling and deep respect of the market ... then you have arrived ... but "arrival" itself is somewhat of an illusion, for the circle of trading is an infinite circle, and will never be closed.

    Just my 2 cents,
  6. Wow. Pretty heavy stuff candle.

    While I'm not to hepped up on indicators, a couple of the traders that I admire the most, upon whose arses I would not make a pimple, use them religiously so I'll have to assume that I am the one whose knowledge is lacking.
  7. Yes, indicators serve the purposes of:
    a) providing a pictorial basis upon which to assess the probabilty of success of risk capital
    b) providing a pictorial context within which to extrapolate the potential dollar magnitude associated with both the probability of success and the probability of failure

    Such a pictorial context is invaluable for traders who are inherently right-brained.

  8. ron2368


    So I guess that those left brained traders won't even need charts.:eek:

    I have used stochastics for many years and started with the stoch in Bresserts product cycletrader and still use it on my daily charts. This stoch is very different from the standard one with most charting software (like qcharts). As a package it is good but if coupled with another non related method it can become more effective( like Elliott wave, Gann analysis, whatever).

    Stochastics are difficult by themselves since they can remain in os/ob conditions and are prone to unexpected( can figure it out after it happens) divergent moves. I have occasionally used BBands but figure its the same basic deal, sometimes great /bad results.
  9. Grabbit



    You used the word pictural three times. And indeed I agree, that's exactly what indicators are all about: to give a visual interpretation of what is going on, of things that you otherwise almost certainly would not have noticed.
    Any attempt to recalculate what indicators are doing or make calculations on how you should work with them (as sometimes presented on this board) is like re-inventing the wheel, failing to take the advantage they can present of visualizing the movement of the price.
  10. Most (all?) indicators are derived from the basic parameters of price, volume and time, and are therefore merely a convenient substitute for a well-calibrated eyeball. Some people have an eyeball sufficiently well calibrated to not need indicators.
    #10     Nov 9, 2001