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Stochastic Oscillator

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mattenc said:
I am new, looking, reading and listening - your comments on this method
Click to expand...

matt,

the stochastic can be used in ranges to simply indicate entries and exits when volume etc are useless to go by. For momentum trading it's best as a filter or scanning device as kennas said.

I don't use it any more.
 
Hi mattenc

I think that as time goes on and you become a better trader you will look at indicators less and less. You will probably just look at the price chart and draw trendlines...e.t.c. So don't get hooked on them look more at patterns and volume and so forth
 
I thought I might revive this thread . Why you might ask ?
Well in my trading journey this is the one indicator which I find being used above all others by the Traders that I respect and know to be profitable.
I guess it doesn't rate too much of a mention here as it is easier to criticize indicators generally .
I acknowledge the following... Indicators are over used
Indicators more often than not are used incorrectly
Most indicators are processing the same information
only slightly differently..
However that doesn't mean that indicators are not useful and cannot be used successfully with certain trading perspectives IMO.
 

Although i don't use Stochastics personally, many systematic traders use it.

There is as we discussed, alternate ways to use it as well. Instead of a counter trend indicator, you can use it as a trend indicator. So when overbought, buy instead of sell.

As we discussed Waza, this can be handy in identifying whather markets are trending or counter trend.

Cheers,


CanOz
 
I use it mainly in automated strategies where it is quite useful imo

An indicator is just a consequence of price. It will only obstruct your view in my opinion.
Click to expand...
Thats a valid viewpoint however what about newbies who haven't spent the countless hours of chart time to read price action accurately . I think it would be a good starting point to use an indicator such as a stochastic as long as they study what it is representing and not overuse it.
If I have time over the next few days I will show a setup I use for entry in discretionary trading using the stochastic...
 

Yes, I can see, your point also valid. I am sure many traders find them useful.

My view is based on my experience, so much time waisted looking and adjusting them
to tame my uncertainty and not looking at what was in front of me.

If I have to give an advice to a newbie I will invite them to just screentime at a 1 minutes candle chart for about 4 hours a day on only one instrument without taking any trade for a month, just to get familiarise with the dance and in the same time to learn to spot the points where the battles between the parts occurs and start to think how he/she can get advantages of those battles.
 
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