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Stochastic secrets

  • #1
  • First Post: Edited Oct 7, 2008 1:09am Sep 1, 2008 1:45pm | Edited Oct 7, 2008 1:09am
I have been using Stochastic for a long time and it’s very well integrated in my trading system. Using it in hundreds of trades had showed some secrets (secrets that I’m not unwilling to share).

But the purpose of this thread is to make other traders who share my view, to unleash their discoveries and techniques on the stochastic.

The attachment contains my currently known and tested facts. (P.S. - updates will come periodically)

Waiting for feedback.
Attached File(s)
File Type: pdf Stoch_02-09-08_update.pdf   75 KB | 21,418 downloads
File Type: pdf Stoch_03-09-08_update.pdf   99 KB | 16,729 downloads | Uploaded Sep 3, 2008 1:55am
File Type: pdf Stoch_11-09-08_update.pdf   113 KB | 11,813 downloads | Uploaded Sep 11, 2008 1:26am
File Type: pdf Stoch_25-09-08_update.pdf   149 KB | 15,020 downloads | Uploaded Sep 26, 2008 9:34am
File Type: pdf Stochastic7.pdf   235 KB | 25,460 downloads | Uploaded Oct 7, 2008 1:08am
  • #2
  • Sep 1, 2008 8:11pm Sep 1, 2008 8:11pm
Redtrader, you use 3,2,3 or 3,3,3 stoch ? I think you have some mistake in pdf.
Rich is just a definition !
  • #3
  • Sep 1, 2008 8:13pm Sep 1, 2008 8:13pm
ok but is is exponential and close/close?
  • #4
  • Sep 1, 2008 8:50pm Sep 1, 2008 8:50pm
The secret about stochastics is to throw that useless indicator in the garbage can.
Private message me for a link to my order flow website.
  • #5
  • Sep 1, 2008 9:39pm Sep 1, 2008 9:39pm
on what time frame do you observe these Stochastic secrets?
  • #6
  • Sep 1, 2008 10:26pm Sep 1, 2008 10:26pm
please i can't open the attachment any help please.thanks
  • #7
  • Sep 2, 2008 1:27am Sep 2, 2008 1:27am
Quoting smartearn
please i can't open the attachment any help please.thanks
Smartearn you will need to install Adobe reader.

Peace out
  • #8
  • Sep 2, 2008 2:14am Sep 2, 2008 2:14am
Quoting RedTrader
I have been using Stochastic for a long time and it’s very well integrated in my trading system. Using it in hundreds of trades had showed some secrets (secrets that I’m not unwilling to share).

But the purpose of this thread is to make other traders who share my view, to unleash their discoveries and techniques on the stochastic.

The attachment contains my currently known and tested facts.

Waiting for feedback.
thanks red! it sounds good. i will do some testing with it and see if it fits into some of my timeframes!

nice document btw! cheers, mong
  • #9
  • Sep 2, 2008 8:20am Sep 2, 2008 8:20am
Thanks , but can you tell me, whats your Stochastic setting ?
  • #10
  • Sep 2, 2008 8:53am Sep 2, 2008 8:53am
First of all I wold like to thank you for your replies.

10x hazenvnn for noticing. Yes, it was a mistake writing 3,3,3 (little tired yesterday :| ). I corrected that by updating a new pdf in the first post. Also I specified the other parameters. That makes the tings look like:

Stoch settings:
- K% = 3;
- D% = 2;
- Slowing = 3;

- MA simple;
- Price field Low/High;

- levels 80, 70, 50, 30 and 20.

As for the time frames: H4, M30 and M15/M5.
  • #11
  • Sep 2, 2008 9:24am Sep 2, 2008 9:24am
Hers my secret with stochastics. Not much of a secret but...only look for over bought signals and sell them in down trending markets. Ignore over sold signals in a market that is trending down. Only look for over sold signals and buy them in up trending markets. Ignore over bought signals in a market that is trending upwards. ANd Im not talking about 5 minute charts here cause I cant get caught up in a trend on a 5 minute chart...its just noise. Im talking 4 hours at the smallest time frame all the way up to monthly charts...
  • #12
  • Sep 2, 2008 9:30am Sep 2, 2008 9:30am
Thanks RedTrader

I use stoch as a confirming factor for trades. It is always helpful when we can learn from the experience of others. I have a couple of questions:

1. Time frames - why not 1 hour? In your experience, is stoch not as reliable in the 1 hour as other timeframes?

2. You mentioned that you use stoch within your trading system. Can you be a bit more specific without giving details you prefer not to divulge? ie. Using moving averages or MACD or news trading etc.

3. I am a little unclear about your 'others' example. Am I correct in saying that if you take a position with stoch moving below 70 (or above 30) and the stoch retreats back to above 80 (below 20), you wait to exit the trade until the stoch moves back below 80 again (above 20) ? Why not when it breaks the 80 (20) in the first place?

Thanks

T
  • #13
  • Sep 2, 2008 10:00am Sep 2, 2008 10:00am
Quoting JohnDimitri
Hers my secret with stochastics. Not much of a secret but...only look for over bought signals and sell them in down trending markets. Ignore over sold signals in a market that is trending down. Only look for over sold signals and buy them in up trending markets. Ignore over bought signals in a market that is trending upwards. ANd Im not talking about 5 minute charts here cause I cant get caught up in a trend on a 5 minute chart...its just noise. Im talking 4 hours at the smallest time frame all the way up to monthly charts...

I agree. All would be need then is a trend indicator. I use RSI set to 51 with lines on the 40 and 60.
  • #14
  • Sep 2, 2008 10:01am Sep 2, 2008 10:01am
Quoting RedTrader
First of all I wold like to thank you for your replies.

10x hazenvnn for noticing. Yes, it was a mistake writing 3,3,3 (little tired yesterday :| ). I corrected that by updating a new pdf in the first post. Also I specified the other parameters. That makes the tings look like:

Stoch settings:
- K% = 3;
- D% = 2;
- Slowing = 3;

- MA simple;
- Price field Low/High;

- levels 80, 70, 50, 30 and 20.

As for the time frames: H4, M30 and M15/M5.
thanks for posting this thread i've been a felower to stochell since you really don't want to throw all your cards out....let me throw mine. I usually use stoch with majors reversal i.e suport and resistant couple with trend lines
Respect a man, and he will do all the more.
  • #15
  • Sep 2, 2008 10:20am Sep 2, 2008 10:20am
Quoting urchman
thanks for posting this thread i've been a felower to stochell since you really don't want to throw all your cards out....let me throw mine. I usually use stoch with majors reversal i.e suport and resistant couple with trend lines
http://www.forexfactory.com/images/editor/attach.gif http://www.forexfactory.com/images/editor/attach.gif THIS IS WHAT IM TALKING ABOUT
Attached Image (click to enlarge)
Click to Enlarge Name: urchman.gif Size: 27 KB
Respect a man, and he will do all the more.
  • #16
  • Sep 2, 2008 12:09pm Sep 2, 2008 12:09pm
Quoting JohnDimitri
ANd Im not talking about 5 minute charts here cause I cant get caught up in a trend on a 5 minute chart...its just noise. Im talking 4 hours at the smallest time frame all the way up to monthly charts...
Agree with you. Of course I'm not trading the 5 minutes trends. I use that time frame - and the signal - for a much more detailed entry (when I decide that is better to use a 25 S/L). As for the decision to buy or sell, I use 4 hr -for long term trades - and 1 hr (or 30 mins - I have bellow an explanation why sometimes 1h and why other times 30) for short term trades.

Of course, you are right when you say that in bearish markets ignore the buy signals and take the sell signals and vice-versa in the bullish markets but the purpose of the thread is to see the stochastic in a little detail, with more accuracy etc. and, by sharing he's/her's experience, to make us all use the stoch in an even more profitable/protected (avoiding false signals etc) way.

Quoting tsquad
1. Time frames - why not 1 hour? In your experience, is stoch not as reliable in the 1 hour as other timeframes?
T
I'm using it as an entry point basically on 1h but when the market it's more volatile I use M30 (but with the condition that the last candle to close in the direction in which the market should move).

Quoting tsquad
2. You mentioned that you use stoch within your trading system. Can you be a bit more specific without giving details you prefer not to divulge? ie. Using moving averages or MACD or news trading etc.
T
I concentrate 1) on the chart itself (trends, fibo levels, fibo fan - if applicable -, patterns and candlesticks) and then 2) on the indicators - Bollinger bands and TRIX.

Quoting tsquad
3. I am a little unclear about your 'others' example. Am I correct in saying that if you take a position with stoch moving below 70 (or above 30) and the stoch retreats back to above 80 (below 20), you wait to exit the trade until the stoch moves back below 80 again (above 20) ? Why not when it breaks the 80 (20) in the first place?
T
To be sure that it's not a false signal.
  • #17
  • Sep 2, 2008 12:11pm Sep 2, 2008 12:11pm
Quoting urchman
thanks for posting this thread i've been a felower to stochell since you really don't want to throw all your cards out....let me throw mine. I usually use stoch with majors reversal i.e suport and resistant couple with trend lines
Yep. I'm using it on reversals too, but for long term trades.
  • #18
  • Sep 2, 2008 1:55pm Sep 2, 2008 1:55pm
Quoting grkfx
The secret about stochastics is to throw that useless indicator in the garbage can.
I believe that this is the TRUEST opinion in this post. Really.
  • #19
  • Sep 2, 2008 2:33pm Sep 2, 2008 2:33pm
Quoting charvo
I believe that this is the TRUEST opinion in this post. Really.
I think it is good for confirmation though.

But I would NEVER use any indicator in isolation.
  • #20
  • Sep 2, 2008 3:24pm Sep 2, 2008 3:24pm
Quoting charvo
I believe that this is the TRUEST opinion in this post. Really.
I have to agree that trading for a long time based only on trend lines, psy levels, fibo (+fan) levels, chart and candlestick patterns (of course not forgetting about the fundamental part) I reached the conclusion that all stays in the chart but a) in order to minimize the S/L risk/trade and b) to have a much more clear view on the market psychology (oh! look!, the x indicator - oscillator - has just signaled) it's recommended to use at least one "classic" oscillator (rsi, stoch, adx etc.).

Quoting charlinks
But I would NEVER use any indicator in isolation.
You can find in many places things like "use this indicator with at list one of the same class to confirm". But I realized that even with 2 indicators from the same class you just waste time. Every trade implies a risk so... if the economics for that country stays like "that", if the chart says "this", and the indicator says "the same" so do it... if your 80% sure that the price would move in that direction then it's good and you just open the trade.

AN INDICATOR IS JUST PSYCHOLOGY, it offers:
1. an image regarding which are the believes of the mass involved in the trades and
2. (assuming that it's integrated in a strategy) an indication - that's why it's an indicator - regarding the moment when the trade should be opened.

So, based on experience, a trader could use one indicator of a certain type (if I understood correctly the context of "isolation" - at least that's how I proceed).
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