Stochastics

private discussion - maths relationships but most will be obvious to all

 

Duh! forgot chart

 

when I said a channel is mathamatically perfect and a no-brainer, the last post is a very simple example. No discretion; no rejigging. All PA is math related and channels are the easiest to use to grasp this.

Simple, powerful. It's another indicator.

What do indicators give that PA alone dosen't. Visually obvious.

Sheesh, I could go on for days. Most of the meat is not on this chart.

 

Very nice post.

You are right, most traders make the mistake of waiting for indicators like "Stoch's" to "turn" or "cross". Normally, by that time they have missed the best part of the move and are now are caught in "price noise" as the market starts to go against them for their late entries.

 

Thanks for getting back to me. But you didn't answer ANY of my questions about your 3X daily range claims or show us a simple stochastics pattern. All you did was post "another person's signal system" with a stochastics indicator of unnamed parameters that you claim would have captured 3X the Mar 27th ES range... nebulous and evasive at best IMO.

Why no clear proof or specifics? Because in the past when you've described some of your methods in sufficient detail to backtest them, it didn't turn out well? Here are two examples. As you can see from the equity curves, the results are more consistent with your trading contest performance than with capturing 3X the daily range of anything.

"Rocket" testing methodology:
http://www.elitetrader.com/vb/showthread.php?s=&postid=1078242#post1078242

"Rocket" equity curve:
http://www.elitetrader.com/vb/attachment.php?s=&postid=1112121

Buying the 0 to 7 turn of the "P,V Boolean relation" methodology:
http://www.elitetrader.com/vb/showthread.php?s=&postid=1278985&highlight=buying+boolean#post1278985

"P,V Boolean relation" equity curve:
http://www.elitetrader.com/vb/attachment.php?s=&postid=1278986

I'd be remiss if I didn't post an equity curve of my own. You offered "an instruction book for creating a new kind of indicator" and I appreciate that as I'm always looking for fresh ideas. What did you mean? You weren't saying that your default parameters for STOCH and MACD makes them new, were you? Anyway... the system that produced this equity curve:

1) Is based on three simple indicators of my own design that gauge price, volume and their derivatives over multiple time frames.
2) Uses EOD data and makes all trades on the following day's open.
3) Can be run on any list of stocks without first filtering for RS, EPS, etc.
4) Captures small chunks of moves and works in all market conditions.
5) Is stable across all parameters. In other words, if you vary the indicator parameters +/- either way, the system is still roughly as profitable.
6) Most importantly, performs in real time as it does here.

This is the system I was going to trade when I challenged you to a trading contest last year. It can't come anywhere near to capturing 3X daily range but it would have done a lot better than -24%. Do you think I should go back to the drawing board because I'm stuck in the old paradigm? What would it take for me to go from the B list to the A list?

 

You can see that by getting to a great conclusion, it may be possible for others who show up to get to the same place.

 

I don’t trade candles, time based bars, textbook patterns, or trend line breaks. Nor do I try to get in at the top or bottom. My main objective is to preserve capital by taking high probability trades with little to no heat, and in doing that, taking a clean slice out of the middle AFTER trend reversal is confirmed is the method of my madness.

Again, with after the fact charts, hindsight is always 20/20. Your entry could have just as easily went against you in real time, as that squiggly line was no doubt fluttering at the cross and could have crossed back down a few bars later. However, I note you have an outside green bar. Although it didn’t take out the bottom of the red bar, it did not break below and closed green at an area of some sort of cryptic support. I don’t use these setups, but can understand the merit of the trade from what little is there. I seriously doubt you can trade with any positive consistancy before the green bar closes on just the fluttering cross as you claim (I know, your secret sauce is the magic link missing, LMAO!). That said, there are probably as many trades elsewhere on your chart that didn’t fare well. Not painting the entire chart is a sign something is being hidden, aka, as cherry picking. But I’ll humor you and give you the benefit of doubt until you prove otherwise.

I don’t have ready access to GBP data, so I’ll just make use of your chart. Given the limited view of the chart displayed, broken down with CVB’s, my entry would most likely have been at the arrow I annotated on your chart, and perhaps would have shown a DB. Without having an actual chart, that is merely and educated guess at this point.

BTW, aren’t forex traders typically those who blew out their accounts and then scratched up a few dollars on their wifes credit card to open a forex account due to the extremely low minimum required?

http://i31.tinypic.com/30sfuqp.jpg


In edit: the "private" charts being posted publically is telling. There are dozens of places to post charts privately, and yet we are supposed to believe that the only motive for doing so here is a private conversation behind the scenes? Those doing so are showing their true colors.

 

Good day, chaps and ladies,
The manure is getting deep in here! And my goodness, don’t any of you have a life outside of this cesspool? It’s spring time, get your lazy butts outside and enjoy it!!!

YH, I’m sorry you waited by your screen all weekend waiting for me to reply!! But not to cause you any more anxiety, I’ll make a couple of quick notes to ease your tension. Consider yourself special, because I rarely post during market hours. We cave dwellers need every ounce of power that our two brain cells can muster chiseling those elementary trade setups on our stone tablets. Uggg!

To the thread, whenever anyone starts posting charts and then won’t explain what they are looking at under the guise of “it’s a secret,” it sends up a red flag to me. If someone doesn’t want to share their chart setups, I sincerely respect that. However, if they don’t want to reveal their strategy, then don’t post the chart, as it serves no purpose other than being pompous. That behavior comes across as either trying to impress the newbies or convince the masses that they are somehow are a god to trading hoping for attention and bowing at their feet. It would be a safe bet to say anything invented by those participating on ET has already been done by many others before them and most likely discarded to the trash bin several times over.

When people flavor their replies with “I trade huge size, I’m not going to show my hand, I don’t want “them” to go after my stop, etc.,” I find they are either play acting floor trader or are paranoid. It is a safe bet that “they” don’t have super computers scanning every word of ET searching for your stop. Furthermore, bloviating in lengthy empty rhetorical discourse how their superior insight is far above those they are trying to convince while remaining cryptic and giving nothing of value other than “I can’t reveal that” also brings out the red flags.

GL, you said I puzzle you in the manner I respond to some people. I simply have a low tolerance for bull$hitters, flipfloppers, and utter nonsense. On a lesser note, as an example, I will use your comment you have helped many traders. Great! But the real question is, are they making any money?!!!! You say so and so uses X indicator as if that somehow validates its use. And saying some floor traders use stochastics, well one only has to point to a certain bankrupt charlatan named oscar to discount that remark as having any value. You comment X is a good trader and profitable. Unless you are his CPA, and you very well may be, it serves no purpose other than trying to convince others that your way has merit if you do not disclose how you came across that information. Statements like these are what I consider empty rhetoric. All noise, no substance. Same as posting an after the fact chart void of any explanation pretending to be seeing something no one else is able to. This is where I start poking with sticks. I mean none of the above in a demeaning manner, and it’s certainly not directed towards you personally, as you have been nothing less than a gentleman. I’m merely making an observation.

Back to YH. The above may not apply to you, and make note that I made no reference that it did. But to be perfectly honest, I’m on the fence as to whether you are genuine or not. So far, your replies are full of holes and come across as nothing but delusions of grandeur. Of course, I most certainly will give you the benefit of doubt until you show otherwise. Moving on, one example is your claim of how you can magically see the future with moving averages when dipped in your secret sauce. The fact is, moving averages’s require many subjective settings, Exponential vs. simple, vs. weighted, vs. smoothed, etc. Then there is the infinite lookback period that must be decided. Is a 10 bar period better than a 50, or a mystical fib, or your mothers birthday, the month the moon lines up with the earth, etc. Of course, you can claim that your immeasurable wisdom of the market structures allows you to choose the perfect formula/number combination that allows you crystal ball clarity ahead of price movement. And we mere mortals can accept that empty response on face value or we can instead look to your own acknowledgement that channels can be built with mathematical precision. Given that channels are essentially two trend lines one above the other built on absolute values derived from price points that require no secret sauce, that pretty much blows your moving average theory out of the water, or any other indicator for that matter. Simply put, price being king to all else still stands on its own merit. If you need some magical make believe voodoo to reinforce the validity of an indicator, the indicator has no merit, as you can just as easily point your genius hocus pocus towards price alone and leave those “fluttering” indicators in the drawer. Admittedly, I haven’t studied your replies in-depth, and it is dark here in my cave, so feel free to so embellish further on my ignorance. I’m sure the troops will enjoy it.

Perhaps while everyone is thumping their chest comparing penis size, someone might take the time and ask little jimmy why he praised jack’s writings on page 40 and then attacks him several times later beginning on page 46. Especially those who continually patted him on the back for posting those “nice looking” colorful charts, as it didn’t do much for your credibility. Perhaps that will enlighten the group on the tone of some of my replies.

With all due respect, I maintain price is still the main ingredient and anything else is just fluff. I refer you to HolyGrails excellent description on page 22 of this thread. I couldn’t have said it any better myself. Contrary to the accusations, this is not Neanderthal “belief,” but the result of many years of my own research, spread sheets, and countless thousands of hours of screen time. Price doesn’t “flicker” and it doesn’t need to be “stiffened.” After 50+ pages, no one has statistically proven otherwise. And the ludicrous fallacy that traders first learn price action and then move on to indicators is as ridiculous as saying momentum leads price. And believing one lone stochastic doesn’t provide much information, but by stacking on an additional stochastic or two, you get clear cut signals. Priceless! Nonetheless, regardless of what one uses, newbies should be exposed to both sides of the equation. It is clear why so many fail at this game, thus my response.
Again, for clarification, I do not use textbook chart patterns or breakouts and those are not what I consider price action for the context of this thread. That type of trading will have the smart money cleaning your clock at your every move, so to speak. As for everything else, I have already explained my perspective on pages 12 and 32.
In summary, no proof, no merit, duly noted. From my cave in the land of Neanderthals, I remain in total awe of the genius's at work here in the Land of Oz, a.k.a. ET.

Best regards to all,

st

 

Thanks Stealth. Waiting to catch a smaller piece of a move after the direction has been confirmed is something that I need to get better at. Instead, I am always perched at the edge of my seat waiting to catch the beginning of the reveral - but why bother? 2 points at 90% consistency is worth a lot more than 4 points @ 60% consistency. It might not intuitively seem so but since I am only trading 1 car at the moment, I can scale up several times to capture 'more' of that 2-point move before needing to capture more points overall.

 

Well, I guess ST sums it up pretty well. There are PA traders who take the tops and bottoms, and those who like ST take the middle, more like Dow Theory. Nothing wrong with that - the big guys add to their positions where ST is likely to trade as the move has proven itself then.

Those who asked have been given all they need for hand holding proof and training that's results in excellent profits taking tops and bottoms using squiggly lines.

It's the old story: those who seek with an open mind find.

To those who take up my suggestions by PM, especially those who invest in some hand holding training on squiggly lines - it would be beneficial to return here in 3 months and say how you have progressed.

What you decide to reveal will be between you and Bill as I'm not sure how much he will allow you to show.

All I can say ST regarding moving averages is I demonstrated how they project into the future and yes, the settings were my personal settings. I am not suggesting they are the only settings nor the best settings - just what I use. They were not kept secret and I shared the template including the automatic drawing of future S&R and reversal times. It is just a method I employ and that I shared, that's all.

I also showed how to use EVRAA in realtime for two weeks. But I have no intention of giving everything I use away, especially to those who have already decided that squiggly lines don't work.

I think I have given as much as I can here and I never meant to argue a point - only show where further enlightenment is available.

So I shall go into retirement as far as this thread is concerned.

Good trading and every success in whatever trading style lights your fire.