Stochastics Filter
The example provided is SAB. To filter out slow stochastics signals I use a 65 and 130EMA, Then MACD and RSI. When MACD is below 0 and the histrogram starts moving up, use the slow stochastic to signal the upward move. RSI should also be below 50 and level or hooking round. Using the Slow Stoch in this style can be very helpful. Because the higher the price moves upward the signals are gonna become unclear and possibly false. The best signals from the stochastic are :dont buy when its at the upper reference and dont short when its at its lower reference. Use them with MACD and RSI are showing oversold signals but always wait for confirmation in the price.
The example provided is SAB. To filter out slow stochastics signals I use a 65 and 130EMA, Then MACD and RSI. When MACD is below 0 and the histrogram starts moving up, use the slow stochastic to signal the upward move. RSI should also be below 50 and level or hooking round. Using the Slow Stoch in this style can be very helpful. Because the higher the price moves upward the signals are gonna become unclear and possibly false. The best signals from the stochastic are :dont buy when its at the upper reference and dont short when its at its lower reference. Use them with MACD and RSI are showing oversold signals but always wait for confirmation in the price.
Attachments
stoch slow 3 min and MACD 1 minute match !
STOCH slow 3 min blue line goes under red
and also Yellow goes underneath blue of MACD 1 min is the time to short. (Opp to buy)
BeamerUSA
STOCH slow 3 min blue line goes under red
and also Yellow goes underneath blue of MACD 1 min is the time to short. (Opp to buy)
BeamerUSA
How about this combo?
How about....STOCH slow 3 min blue line goes under red
and also Yellow goes underneath blue of MACD 1 min is the time to short. (Opp to buy)
How about....STOCH slow 3 min blue line goes under red
and also Yellow goes underneath blue of MACD 1 min is the time to short. (Opp to buy)
This presentation on basic technical analysis I made a week ago. Hope you enjoy it
Chart C1: DPTR 4-month daily chart with 50-SMA
1/ Stochastic gave a buy signal first
2/ MACD also gave a buy signal one day later
3/ Bullish sentiment with the MACD confirmation, prices started to move, volume picked up. In the next 2-trading days, prices increased to $2.28 & $3.03 and daily volumes increased to 11 & 64 MM. Prices kept moving up (4a) 5 of the next 6 trading days to $4.25 (See 4a) but the volume kept decreasing (4b).
Since volume did not go up to follow the prices, we have a situation where technical analysts called: Price volume diversion and the effect is a price reversion is imminent.
Stochastic gave a signal to sell (5a) on Sept 15 when traders could unload their position at around $3.75 a share. Those who waited for MACD signal to sell, it occurred later at the close of Sept. 21 where the traders could unloaded the shares for around $2.00 which meant most of the gain from the run-up was evaporated.
A person with some basic technical trading skills would have sold DPTR at the first signal that came up which is Stochastic signal due to the warnings of the price and volume diversion, also the gain of more than 100% in such a short period is another good reason for the traders to take the first exit. MACD has a weakness due to its nature as a trend follower.
The general rule of technical analysis is traders should rely on more than one indicator to make the trading decision. While traders could be more safe to wait for the MACD bullish signal to get into a position the trade, but waiting for MACD sell signal is always late, and follow Stochastic for selling signal is more proper.
Conclusion: Buy at MACD confirmation, sell at pointing gun 5-a and you'll be happy
Last edited:
[email protected]
This presentation on basic technical analysis I made a week ago. Hope you enjoy it
Chart C1: DPTR 4-month daily chart with 50-SMA
1/ Stochastic gave a buy signal first
2/ MACD also gave a buy signal one day later
3/ Bullish sentiment with the MACD confirmation, prices started to move, volume picked up. In the next 2-trading days, prices increased to $2.28 & $3.03 and daily volumes increased to 11 & 64 MM. Prices kept moving up (4a) 5 of the next 6 trading days to $4.25 (See 4a) but the volume kept decreasing (4b).
Since volume did not go up to follow the prices, we have a situation where technical analysts called: Price volume diversion and the effect is a price reversion is imminent.
Stochastic gave a signal to sell (5a) on Sept 15 when traders could unload their position at around $3.75 a share. Those who waited for MACD signal to sell, it occurred later at the close of Sept. 21 where the traders could unloaded the shares for around $2.00 which meant most of the gain from the run-up was evaporated.
A person with some basic technical trading skills would have sold DPTR at the first signal that came up which is Stochastic signal due to the warnings of the price and volume diversion, also the gain of more than 100% in such a short period is another good reason for the traders to take the first exit. MACD has a weakness due to its nature as a trend follower.
The general rule of technical analysis is traders should rely on more than one indicator to make the trading decision. While traders could be more safe to wait for the MACD bullish signal to get into a position the trade, but waiting for MACD sell signal is always late, and follow Stochastic for selling signal is more proper.
Conclusion: Buy at MACD confirmation, sell at pointing gun 5-a and you'll be happy
The_Snowman
Member
- Messages
- 61
- Likes
- 2
These guys have a pretty good idea what to do with MACD and Stochastics, there are 4 videos in this series - FX BOOTCAMP
hi friend
you can try this.you need to have price and 20 moving average in a separate chart above slow stochastics and macd chart.
How to do?
first create a chart with slow stochastics.
overlay Macd indicator on slow stochastics chart.
Normally macd has no oversold or overbought levels.
but now you have those available.
it happens so that at times macd &slow stochastcs may show a drop but actually price may not drop much. to safeguard our interest,we look at price and 20 moving average,to short if price fall below 20ma or go long when price above 20ma as a confirmation type of thing.
Moral of the story
when you use any oscillator,dont go alone with it. use a price &moving average thing to get confirmation before you jump.
It doesnt matter if you enter a bit late into a winning trade than jumping early based on a false signal from an oscillator.
I thank metastock video lesson by Kevin Nelson for this RARE INSIGHT ON OSCILLATORS.
http://www.youtube.com/watch?v=hOYUsoRxkJc
This video is a brief tutorial about what the Williams % R indicator is and how to use it in MetaStock Software. The presentation is given by Kevin Nelson a former employee of MetaStock who now heads up his own training firm called BreakAway training. If you would like to know more about Kevin's training, visit his site at www.learnmetastock.com. If you would like to know more about MetaStock, and even get a 30-day trial, visit metastock.com/google6
you can try this.you need to have price and 20 moving average in a separate chart above slow stochastics and macd chart.
How to do?
first create a chart with slow stochastics.
overlay Macd indicator on slow stochastics chart.
Normally macd has no oversold or overbought levels.
but now you have those available.
it happens so that at times macd &slow stochastcs may show a drop but actually price may not drop much. to safeguard our interest,we look at price and 20 moving average,to short if price fall below 20ma or go long when price above 20ma as a confirmation type of thing.
Moral of the story
when you use any oscillator,dont go alone with it. use a price &moving average thing to get confirmation before you jump.
It doesnt matter if you enter a bit late into a winning trade than jumping early based on a false signal from an oscillator.
I thank metastock video lesson by Kevin Nelson for this RARE INSIGHT ON OSCILLATORS.
http://www.youtube.com/watch?v=hOYUsoRxkJc
This video is a brief tutorial about what the Williams % R indicator is and how to use it in MetaStock Software. The presentation is given by Kevin Nelson a former employee of MetaStock who now heads up his own training firm called BreakAway training. If you would like to know more about Kevin's training, visit his site at www.learnmetastock.com. If you would like to know more about MetaStock, and even get a 30-day trial, visit metastock.com/google6
Last edited:
NVP
Guest Author
- Messages
- 37,934
- Likes
- 2,141
Moderators ......sure this is bordering on a lot of Marketeering/advertising here but actually as long as Newbies realise that - theres some decent free links to how MACD's work and I think theres some benefits there - leave it be if you can ?
thanks
N
thanks
N
Stochastic shows the price location to high/lows. Macd show the trend. So you are analysing 2 different aspects which is already good. I may only recommend adding an indicator that analyses volatility and another that analyses volume.
You may find Stochastics Slow recomended settings for daily charts based on 10-year scan at
Stochastics Trading System
The same for MACD could be found at
MACD Trading System
(just select 1-day chart as bar period)
Unfortunately in spanish (programation in english) but here you can see one of the best trading systems with MACD and Stochastics,
Sistema “LA BONITA” Tradicional | BLOG eurostockscreener
Sistema “LA BONITA” Tradicional | BLOG eurostockscreener
neil
Legendary member
- Messages
- 5,169
- Likes
- 752
There are many systems that work. Many approaches that are correct for one and wrong for another.
Learning first what works for you is better. Start from a blank mind and chart your own progress. Just because a system does not work for one person does not mean that it wouldn't work for you.
Basically, just start form the basic of reading pure price. Don't fall into the analysis paralysis trap.
Learning first what works for you is better. Start from a blank mind and chart your own progress. Just because a system does not work for one person does not mean that it wouldn't work for you.
Basically, just start form the basic of reading pure price. Don't fall into the analysis paralysis trap.
TEAMTRADER
Active member
- Messages
- 192
- Likes
- 85
I recommend waiting for the Stochs and MACD to show divergence.
The light areas on the indicators I have highlighted show that they are all going down (see the diagonal traps).
The price made a higher high at the second vertical so this is a safe trade.
I am waiting for an alert/signal based on trendlines on both Stochs and MACD - trendlines are VERY useful on indicators.
I have the rules if anyone is good at coding - so far no one has been able to code it so it must be complex.
Regards
TEAMTRADER
The light areas on the indicators I have highlighted show that they are all going down (see the diagonal traps).
The price made a higher high at the second vertical so this is a safe trade.
I am waiting for an alert/signal based on trendlines on both Stochs and MACD - trendlines are VERY useful on indicators.
I have the rules if anyone is good at coding - so far no one has been able to code it so it must be complex.
Regards
TEAMTRADER
