The Stochastic Indicator

trendy · Aug 21, 2003

Quote from dawg:

an iceberg trade is for an intermediate trader, so you are correct.

You enter a short when the stoch go below 25 and you do not exit until they cross over the 75. This trade is for a slow trend which is why you do not exit when the stoch leaves the 25 area. So you have two basic trades rockets for beginners and you would add the iceberg trade as you become an intermediate and have two trades in your arsenal.

If i have anything incorrect i am sure jack will correct any mistakes, but i believe that its right.

dawg
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trendy · Aug 21, 2003

Quote from dawg:

not sure. jack needs to clarify those things.

You enter a trade and you have no idea whether it will be a rocket or an iceberg. Not sure how the internediate handles it.

dawg
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trendy · Aug 21, 2003

Quote from jack hershey:

Super observation. This is a real stickler for beginners. they have to exit. this is where the wash trading get to be so practical.
Ice bergs are slow trends and beginners have to stay out of these.

It must seem backwards but the rocket is the "easy" money and in the slow trend it is not so easy to make slow money.

what seems to happen is that by doing lots of wash trades and always taking action just bt rote, you get to a place where you have beat the emotions which freeze your transition from beliefs to behavior. Until you can act ( and act in a timely manner) you cannot acquire confidence in the simplest things.

The "of well, I knew that" of paper trading is incidious in many ways. The antidote is real wash trading. As you look at the daily grind, you become aware of the fat thattrading costs become negligible. these are just "movie ticket things" I. E., the "price of admission.

Wash trades lead to trading the right side of the whiplash.

rockets teach you how the market becomes conjested at the end of a rocket. It takes being and intermediate to learn to trade slow trends; they do not always end in reversals but often they do.

We alwqays have to remember that Stoc is a "relative" indicator. It will always use it's full range of values because it is tuned to just the vlaues that are in the calculation. In flat times it still will go to extremes. This is where the rocket comes from.

Intellectually many people cannot rise to the occasion when dealing with relative indicators. In fact, there are many "non signals" that are used by practioners who have not gotten to a point of making a lot of money. What they do is continualy get into places that will not turn out well.

You can see the back tester's dilemma showing up a little bit so far. as his market continues to be mostly flat, we grind away and have daily opportunities to make a small amount of money.

this am, yet another time a rocket went into congestion and we got out as the congestion began.

Think about it. Wouldn't some of you take the crossing into the tape as a signal to got short. Well if you did and didn't know how o trade congestion on the right side of being whipsawed... soon you get whipsawed by getting exactly out of phase because of how most people handle the interval between the two trends (fast and then congestion laterally). There is no interval. You must reverse at the peak. People wake up at the end of the retrace off the peak and "hope" that the trend resumes. There is no indication nor signal that is "saying" this at all.

Congestion is within the tape (20/80). It is simply a weaving to approach and be centered on the 50%. The weave is wide in slow markets (flater ones) and the weave is narrow in faster ones. All of this is extinguished (diminished, really) when the equations move out of the former trend territory.

By reading this and relaxing you will be going through a process of absorbtion. All these thing can become part of your rational thinking. People who continually crap on me like bdixon, j0m0, and daniel, are people to read closely so you can discern what they are missing in their approaches. They, naturally, look at what I say as serving one one the purposes they assign to me. On the otherhand, many people are going to find out quite thoroughly that I can put myself in almost anyone's place simply because I have witnessed, through mentoring, for years and years how people behave and are programmed. Going from belief to behavior is oftern fouled up by past experience. Getting to a balance on being able to go with the flow of making money is not easy and takes effort. I observe the effort of people to find out where they are. by going to that place I can then be supportive of getting to a better place.

bdixon doesn't see the three sequential parts of congestion, convergence and centering. He doesn't see that centering takes on a formation that isone of three: symmetric, FTP or FBP; nor does he see this biases the BO. He sees the quaint "chop". Others are looking at how it is continually making money rythmeically until the centering. If you can't see centering you get your toilet flushed on the BO at least time if you are still in the trade. Experts catch the BO with bracket entries.

just read this and get to a place where it is helpful and relaxing to you. It will come into play as we soup up the thread. right now we are just doubling our inital capital for the first time.
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kleck · Aug 21, 2003

Quote from StockSniper:

I started off today by jumping into the market without a proper pre-flight, and without waiting for clear signals. I got in trouble right away, reversing out of bad positions just as the market was turning, etc... In no time I was down 4 points. It was the kind of performance I'm striving to get AWAY from.

About midday, I took a break and got ahold of myself. I caught decent parts of the 1:00 long iceberg, and of the 2:00 short iceberg. Despite a few more mishaps (things I know better than to do), I came all the way back to a 3.5 gain on the day. When I was operating at my best, I was doing a pretty good job of iceberging. This is mostly stuff I've learned on this thread. Thanks Jack. If I had NOT gone out uncontrolled in the early morning market, this would have been a 7.5 point day -- easy.

Then these, although good trades, would not be Icebergs?
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StockSniper · Aug 21, 2003

Quote from kleck:
Then these, although good trades, would not be Icebergs?
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Lol, reading this more closely, I guess that technically I'm doing a modified form of icebergs, and not strictly following the recommended timing. I guess the difference is that I'm attempting to incorporate some of the other signals that I've been reading about on this thread (P/V, primarily) as cues for entering and exiting my trades. Thanks for pointing this out kleck.

oddiduro · Aug 22, 2003

Flaw card: Lower volume on next bar

Look for wash

Reverse on MACD crossover

* Faced paced trends should build immediately. If they do not, do not wait for the stop to be hit. WASH.

Today was a big gap up. By the sync bar the MACD was beginning to fail. 5-2-3 was also failing. On MACD crossover would make a great trade.

Icebergs are still in on 14-1-3 and approaching 10 points in profit.

( I myself got out when the 5-2-3 fast line came out of the oversold zone )

In the future I will hold until threatened with a wash on the initial trade.

monkfish · Aug 22, 2003

Looks like the lower IT trendline in place from the 5th might be in danger here. Any thoughts?

bubba7 · Aug 22, 2003

Quote from monkfish:

Looks like the lower IT trendline in place from the 5th might be in danger here. Any thoughts?
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right on.

this is an elegant opservation

We have volume and probably news. I was counting on the President in the sagebrush until Labor Day.

IT Leg 6 went longer than other legs, so we look at that and comment in preflight every day.

the volume is not summer volume today. you can definitely see how we have done the teverse of the IT and it went through as well.

Watch this. You are in an iceberg (I will clean up the iceberging again soon)

we are toying with the "Failure to break out down" IT flaw card. Is says "reversal" on the back. Formations rule on this HS, DB and FTP's

bubba7 · Aug 22, 2003

Beginners on the 14,1,3 are looking at their only option. for them this is a traverse to support.

they may not get into intermediate stuff. the goal is to make profits and take no risks.

bubba7 · Aug 22, 2003

The PM market restart today may be a lulu.

Do as you usually do set up for bracketing.

experts are the only ones in a reversal strategy.

Increases in volume are "reading"=== "short"

stay on 5 min and have 10 point scale. do not amplify this situation.

We have hit the left side and the right side several times. today we just took the ride all the way across on the 15min and our stop log looks picture perfect. It is stalled right now.

You held on each VDU and the trend resumed.