Stochastic - page 4

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Sergey Golubev
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Sergey Golubev  

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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 ...

Alain Verleyen
38519
Alain Verleyen  
newdigital:
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.
Molanis
Sergey Golubev
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Sergey Golubev  
yes, i found them here: Creating Expert Advisors Using Expert Advisor Visual Wizard

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?

EURUSD, H1, 2013.06.06, MetaQuotes Software Corp., MetaTrader 5, Demo


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 ...).

Sergey Golubev
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Sergey Golubev  
newdigital:


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":

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Stochastic

newdigital, 2013.06.03 19:17

So, rules for buy:

  • slow stoch (main line) on bar #1 is below 20
  • fast stoch on bar #1 is below 50
  • medium stoch on bar #2 is below 20
  • medium stoch on bar #1 is above 20
  • medium stoch main line on bar #1 is above medium stoch signal line on same bar #1
  • medium stoch main line on bar 2 < medium stoch main line bar #1


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.


Mehrdad Shiri
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Mehrdad Shiri  

hi newdigital:

is there some thing about time frame ?

Sergey Golubev
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Sergey Golubev  
TIMisthebest:

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


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Stochastic

newdigital, 2013.06.03 19:07

For now - we can describe the trading rules for those 3 Stochastic indicators:

  • 34/5/5 (fast stoch)
  • 55/8/8 (medium stoch)
  • 100/8/8 (slow stoch)






Sergey Golubev
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Sergey Golubev  
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.
Alain Verleyen
38519
Alain Verleyen  
newdigital:
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.
Sergey Golubev
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Sergey Golubev  
angevoyageur:
I don't think an EA based on Stochastic only can be profitable.
Yes, Stochastic is the filter. But I am talking about the signals from this indi
Sergey Golubev
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Sergey Golubev  

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Something Interesting in Financial Video July 2013

newdigital, 2013.07.09 20:58

23. How to Trade Stochastics Like the Pro's Do

A 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.




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