Stochastics

That's just great, now I've got to go find my obfuscation translator.

 

People that continuously say that indicators are crap are 100% wrong. All you have to do is master a tool of trade to make it usable. I've seen plenty of examples where price only traders make calls that result being a losing trade, so is that to say that price only methodologies are crap too? It's up to an individual to decide what works & what doesn't work. I speak from experience, I only use 1 indicator & have invested a lot of time trying to master that specific tool.

 

I am sorry but that guy (with his screenshot) is funny, he should be on Youtube annual awards LOL.

 

Stealth, I am not up in arms for Stoch Works! as I don't use it, though I use another indicator. In regards to Price Rules! there is another thread where people ask Do Trendlines Work? Well, , some will say TLs are crap & others will swear by them. If we master a tool, any tool, then nobody can tell us that it doesn't work.

 

This is my last post in this thread and it's to help seekers by giving a few clues... cavedwellers won't like this one.

I took the EurUsd on a short for a fast 46 pips, but I had a target well in advance - the pink support on the chart.

As price approached I could see my indicator was about to cross. I reversed long way before the reversal bar on support was complete because I took the trade in a small tick chart. It was time to catch the falling knife - it's a favoutire trade of mine.

The falling blue and black dashed resistance gave me a 7 pip fast reversal short and I was able to reverse long again on the pink support - the indicator now screaming for a move up. All very fast action.

Combining indicators with dynamic S&R is an art. Goinglite has a similar approach yet his charts and technique is very different to mine.

This pink support appeared in different timeframes and the indicators on the bigger timeframe showed imminent crossing. On the smaller timeframes most times there is ZERO LAG for the cross.

Most of what I was looking at is not shown here but suffice to say I love those P&F traders and those price action traders who need a box completion or bar taken out. That style is a great place to start... Price Action is the basics and essentials of trading any profitable method.

I learned those techniques and now I use them as confirmation, knowing those traders are backing me up, pushing me into profit. That's not being a smart ass... it's just the facts of life.

To achieve these kinds of set ups takes years of trial and error and research - to distinguish when chop is ended and trend has begun and what timeframes work best with each other.

If you want to learn how to use indicators you must fist learn to trade naked price action and then think outside the box when trying to develop indicators.

Do indicators like stochastics work? Those who can use them say a resounding YES! Those who can't say NO! Whatever your answer is - it's the right one for you.

 

Let’s do a recap. I asked in the beginning what those squiggly lines give, other than lag, that price alone does not. I posted a chart asking what those squiggly lines tell that the depicted trend lines would not. I asked for reference to any indicator based system that has stood the test of time. Twenty odd pages later, all anyone has been able to provide is name calling, idiotic responses, and after-the-fact charts void of any substance. You can take any indicator known to man and post excellent results in hindsight. You can also back test and then curve fit any system to show positive results. But in real time, they fall flat. Therefore, the only rational conclusion that can be gathered from the irrational responses is they can’t answer the simple question I posed to them.

Now, before you squiggly line pundits get your panties in a twist more than they already are, research Proflogic’s use of an indicator. For the record, I don’t trade his method, but from his postings I can gather that he is probably only one of a very few that applies an indicator in a sensible fashion to his methodology. And I would be almost willing to bet dollars to donuts that even he would agree that it gives nothing more than what a trend line will. Which one to use is a personal preference of the user, no argument here. I’m not anti-indicator per say, just saying the method 99% of people use them is counterproductive. Using canned indicators, even with “secret” settings (it’s still a canned indicator), to give trading signals or setups based on nothing more than “when this line crosses under that line and then does X” is not a viable method and will statistically fail; it’s a given. To believe otherwise is simply foolish when statistical evidence proves otherwise. Another poster here said it best; when you are watching an indicator, you are not focusing on price. Price is first and foremost; anything that follows price is simply getting you late to the party.

Perhaps a clear and distinct definition of what a “fine trader” or a ‘good trader” is in order. Reason being, it seems the best defense this thread has been able to muster is “so and so uses an indicator and he is a fine/good trader,” or the old standard “joe blow wrote a book on how to use X indicator and it works for me.” If barely covering broker fees and keeping your account afloat via your day job is your definition of a “good/fine” trader, then I wish you all the best. If you have been at this game 10-20 years as many of you claim and are not consistently earning 6-7 figures annually year in and year out from trading alone, you are only fooling yourselves.

All in good spirit,

st

 

Please scroll back to my first reply to this thread. I asked, tongue-in-cheek, what an indicator will show that price will not. Not one individual has been able to answer that simple question.

Market conditions the past six months or so have been favorable to trend indicators. With all due respect, please come back in two years or so and see if you still feel the same way. Most likely what is working for you now will not work once the markets settle down and go flat with narrow ranges. I say that with utmost sincerity, as you are one of the good guys. I truly want to see you succeed. But hey, what do I know, I'm just a "cave dweller"!!!

Good trading,

st

 

Lack of tradable range is a killer for many systems including the ones based solely on price (as far as I know). I use MACD's histogram mainly to pick out points in time when price is likely to build enough 'strength' to perform a bounce which at times leads to a reversal. I am not saying that indicators DO NOT lag, of course they do, but presence of patterns via indicators is just as undeniable ImE as price based patterns. I don't support stochastic as I don't implement it, so no comment. All I can say to sum it up from me )) is that as long as there is sufficient range expansion in place there are opportunities present to effectively use indicator based trading, it's a tool of a trade, just like a shovel (sorry for a lame comparison ST)

 

Wow, I'd like to say thank you to everyone who participated in the thread.

I got some really great ideas from the kindred spirits who see the same things I see, and was forced to examine some long held concepts by those who (sometimes vehmently) disagreed.

... at the end of the day, my trading has become even simplier, and when filtered by price and volume (hmmm, I did say that before, didn't I ) , I've been able to create an auto signal gnerator that consistently generates win after win.

Um, um, um, no way. :eek:

P.S. PM if you want the code and settings to chart ... just kidding! - after all stochastics DON'T WORK, now do they?

Best trading wishes all (especially the naysayers, I love the way they push the envelope).

 

... and the last Buy Signal generated by the chart?

Well, we all saw how that one worked-out, now didn't we.

Best trading wishes.