Stochastic Oscillator

bjj9126 · #1 13th May 2008, 01:16 AM

I want to experiment Stochastic Oscillator on daily chart for daytrading & short term trading,

so please let me know the right paramater for this indicator,

Which paramaters I have to use for Stochastic Ocillator on Daily chart...?

Seniors & other members are requested to help on this matter please,

bjj9126
(Prakash)

AW10 · #2 13th May 2008, 05:29 PM

Praksash,
Standard parameter for Stochastics are 5 and 3 for %K line and
3 days moving average for %D line.
But as a daytrader you need to be different from other smart traders who are also using the same parameters.
Suggestion - start with these numbers, and backtest the buy/sell signals genereated by this in past few days. Then change the numbers and backtest again.. so that you can find better combination.
In technical analysis, reliability of one single indicator is always low so also try experimenting by combining MACD / RSI/ Moving average etc to this.

Happy day trading.

darsh_goswami · #3 13th May 2008, 05:53 PM

Quote:

Originally Posted by bjj9126

I want to experiment Stochastic Oscillator on daily chart for daytrading & short term trading,

so please let me know the right paramater for this indicator,

Which paramaters I have to use for Stochastic Ocillator on Daily chart...?

Seniors & other members are requested to help on this matter please,

bjj9126
(Prakash)

Dear Prakash ,...

First thing u need to be cleared about what time frame can u trade on.. The lower the time frame higher the stochastic ratio. otherwise u will get stuck with bunch of singals.

Next ,.. Stochastic can be treated as a reference to find over bought and over sold stocks. Other then that , its not a perfect indication. then too u can go for 14:3 stoch ratio and then buy above crossing 17 from below ,.. and sell below crossing 90 from top. This could give u some idea about increasing or decreasing ratio.

Regards,..

Darsh

bjj9126 · #4 13th May 2008, 06:25 PM

Thank you very much

Darsh & AW10

for your valuable reply

bjj9126
(Prakash)

uasish · #5 13th May 2008, 07:47 PM

Quote:

Originally Posted by AW10

Praksash,
Standard parameter for Stochastics are 5 and 3 for %K line and
3 days moving average for %D line.
But as a daytrader you need to be different from other smart traders who are also using the same parameters.
Suggestion - start with these numbers, and backtest the buy/sell signals genereated by this in past few days. Then change the numbers and backtest again.. so that you can find better combination.
In technical analysis, reliability of one single indicator is always low so also try experimenting by combining MACD / RSI/ Moving average etc to this.

Happy day trading.

High chances of Colinearity problem,when we are using 2 indicators from the same family as Confirmatory.

Blaiserboy · #6 13th May 2008, 08:57 PM

there are many ways to use the stochastic....

try this combination

stoch 5,3 3 9,3,3 35,10,1

you will find that combinatio0n will show you the direction of the market and also every retrace

and couple that with macd 7 10 5 and you will have a very satisfactory entry

and then do that for a couple higher time frames and you will be amazed at the results you get

what i suggest is not easy...... however, if you spend some hours working with the higher time frames you will experience some good precision with your entries

vvvv · #7 13th May 2008, 08:57 PM

Quote:

Originally Posted by uasish

High chances of Colinearity problem,when we are using 2 indicators from the same family as Confirmatory.

ashishda ,wht will go best with the stochastics which will reduce such problems

bjnaikhot · #8 16th May 2008, 04:57 AM

stochastic is the GRANDFATHER of all indicators,most analysts,if you ask about its use,,will suggest that it will generate false signals on too many occsions for our comfort,,most will suggest you that you should use,rsi or macd or some MAs, in combination to stochastics,,even in very very good books and on net,you will find these sort of advice,,and at one glance if you look at buy---sell signals generated by stochastics ,,any novice will get confused and leave it alone...but my 10 years experience with it sugeests me that,in any markets stochastics is THE BEST of all indicators EVER INVENTED...NOT ONLY THAT BUT THERE IS NO NEED TO EVEN SEE ANY OF OTHER INDICATORS,,,FOR FINDING TURNING POINTS,on any time frame charts,,yes...after you find a turning point as per stochastic,,you can IF YOU WANT ,,HAVE A GLANCE at either rsi or kst for just confirmation...please visit my blogg....http://bhoom2tika.blogspot.com/...see my analysis ..i have not mentioned stochastis much in those articles...but i can tell you for sure that my techniques of using stochastics is one of major reasons to identify tops and bottoms with such accuracy......two important things for anyone who wants to use stochastics..1}its a very very sensitive indicator so by nature it will suit you ONLY if you are also sensitive 2}if you learn the art of using stochastics you will have the power and daring to give a call on any market turning points...by any i mean even on one minute charts you will be able to pick tops and bottoms with 90% accuracy........hope you try to learn this art....REMEMBER ...ITS THE BEST....MY BLOG TITLE IS "mastering stochcharts"..BJNAIK...9925673239

rkkarnani · #9 16th May 2008, 09:02 AM

Quote:

Originally Posted by bjnaikhot

stochastic is the GRANDFATHER of all indicators,most analysts,if you ask about its use,,will suggest that it will generate false signals on too many occsions for our comfort,,most will suggest you that you should use,rsi or macd or some MAs, in combination to stochastics,,even in very very good books and on net,you will find these sort of advice,,and at one glance if you look at buy---sell signals generated by stochastics ,,any novice will get confused and leave it alone...but my 10 years experience with it sugeests me that,in any markets stochastics is THE BEST of all indicators EVER INVENTED...NOT ONLY THAT BUT THERE IS NO NEED TO EVEN SEE ANY OF OTHER INDICATORS,,,FOR FINDING TURNING POINTS,on any time frame charts,,yes...after you find a turning point as per stochastic,,you can IF YOU WANT ,,HAVE A GLANCE at either rsi or kst for just confirmation...please visit my blogg....http://bhoom2tika.blogspot.com/...see my analysis ..i have not mentioned stochastis much in those articles...but i can tell you for sure that my techniques of using stochastics is one of major reasons to identify tops and bottoms with such accuracy......two important things for anyone who wants to use stochastics..1}its a very very sensitive indicator so by nature it will suit you ONLY if you are also sensitive 2}if you learn the art of using stochastics you will have the power and daring to give a call on any market turning points...by any i mean even on one minute charts you will be able to pick tops and bottoms with 90% accuracy........hope you try to learn this art....REMEMBER ...ITS THE BEST....MY BLOG TITLE IS "mastering stochcharts"..BJNAIK...9925673239

Hello Bjnaikhot,
You joined the forum in 2006 and this is your just 6th post!!! Seems you believe in quality rather than quantity.
Members here would be benefitted if you can post a few things here about stochastics , the parameters used in various time frames , how to read the charts with stochastics and interpret moves!!! etc., etc.,
I visited your blog but could not locate any info on stochastics!!!! May be i missed the proper link to visit on your blog.
Did see your view on market for 14th May 2008....
Can you please post a specific link from where to get detailed info on Stochastics!!!!
regards
R K Karnani

vvvv · #10 16th May 2008, 05:16 PM

i have been working hard at the stochastics things but have failed till now.yes it points out those tops & bottoms .good for a rangebound market or for scalping the 1 min charts where u need to get out & get in fast.but it fails miserably when the trend starts.it reaches the overbought level fast.as soon as the trend dies down it starts going down from the overbought level. now the question is , where do i get my sell signal at the earliest???there are a lot of things in theory , but practically things are very different.
i define markets in 2 ways - trending & rangebound.
for the rangebound markets, its stochastics...fine...
wht about trending markets - which indicator functions best.also another question is how strong is the trend & wht is the quality of the trend.
when do u know markets have changed from trending to rangebound at the earliest.
now pls dont tell me to look at ADX,MACD or M.AVG