Stochastic - page 4
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Stochastic
newdigital, 2013.06.06 07:51
Thus, the most usual rules/signals (most usually used) for this indicator are the following:
1. main line of indicator is above or below some level indicating overbough/oversold
or
2. main and signal lines are started to move to our direction
or
3. main line of indicator is above or below 50
Item #1 was described on this thread. So, I am going to explain about #2 and #3 ... slowly as usually :) so :
more to folow ...
I created very simple EA based on this condition:
- Moving Averages indicator with period 55, method - simple, apply to close.
- Moving Averages indicator with period 100, method - simple, apply to close.
- Stochastic indicator with the settings 100/8/8
EA is attached.That is why I said that it is the example (as I am not a coder).
============
Just to finish totally with this first condition of Stochastic indicator - look at this image:
MetaTrader Trading Platform Screenshots
EURUSD, H1, 2013.06.06
MetaQuotes Software Corp., MetaTrader 5, Demo
do you like it?
Do you like it? yes ... but it is just 7 trades in a year only ... so - this is market condition setup (not for signals ... not for EAs/ creation ... not for manual trading ...).
Thus, the most usual rules/signals (most usually used) for this indicator are the following:
- main line of indicator is above or below some level indicating overbough/oversold - discussed
or
- main and signal lines are started to move to our direction - will be discussed soon
or
- main line of indicator is above or below 50
I am going to continue and finish this thread this week ... I will need to collect my thinking abilities sorry :)
Thus, we discussed about the following: main line of the indicator is above/below some pre-selected level for overbough/oversould. Next one is coming (with the examples and EAs as well): main and signal lines are started to move to "our direction":
Forum
Stochastic
newdigital, 2013.06.03 19:17
So, rules for buy:
And opposite for sell.
============
For the next few posts - we will descuss about how to trade this setup (or how to use it), and what those rules mean.
hi newdigital:
is there some thing about time frame ?
hi newdigital:
is there some thing about time frame ?
mainly not. it is something related to the settings of Stochastic for example.
1. First case (slow stoch) - it was explained: slow stoch (main line) on bar #1 is below 20
2. Second case - to be explained - fast stoch on bar #1 is below 50
3. 3rd case
3.1. medium stoch on bar #2 is below 20
3.2. medium stoch on bar #1 is above 20
3.3. medium stoch main line on bar #1 is above medium stoch signal line on same bar #1
3.4. medium stoch main line on bar 2 < medium stoch main line bar #1
Forum
Stochastic
newdigital, 2013.06.03 19:07
For now - we can describe the trading rules for those 3 Stochastic indicators:
I mean - if some programmer is coding EA for you using Stochastic so please note: there are 3 very usual cases/signals concerning to this indicator, and it is related to the settings of this indicator in general.
I don't think an EA based on Stochastic only can be profitable.
Forum
Something Interesting in Financial Video July 2013
newdigital, 2013.07.09 20:58
23. How to Trade Stochastics Like the Pro's DoA lesson on how to trade the stochastic oscillator for active day traders and investors using technical analysis in the stock market, forex market. and futures market.
In our last lesson we learned about the RSI indicator and some of the different ways traders of the stock, futures, and forex markets use this in their trading. In today's lesson we are going to look at another momentum oscillator which is similar to the RSI and is called the Stochastic.
Let me start by saying that there are 3 different types of stochastic oscillators: the fast, slow, and full stochastic. All of them operate in a similar manner however when most traders refer to trading using the stochastic indicator they are referring to the slow stochastic which is going to be the focus of this lesson.
The basic premise of the stochastic is that prices tend to close in the upper end of their trading range when the financial instrument you are analyzing is in an uptrend and in the lower end of their trading range when the financial instrument that you are analyzing is in a downtrend. When prices close in the upper end of their range in an uptrend this is a sign that the momentum of the trend is strong and vice versa for a downtrend.
The Stochastic Oscillator contains two lines which are plotted below the price chart and are known as the %K and %D lines. Like the RSI, the Stochastic is a banded oscillator so the %K and %D lines fluctuate between zero and 100, and has lines plotted at 20 and 80 which represent the high and low ends of the range.