http://img833.imageshack.us/i/87707220.png/
I noticed I missed out on much of the conversation in this thread.
Krishere, the reason you can't thank Smartrade for some of his excellent insights is because he has only made one post in this thread since July, so his posts are too old to thank him.
I wouldn't say stochastics is a cornerstone of my methodology, but I sure like the indicator for various reasons. I use it as a momentum indicator, and it needs to be used as a confluence with other elements of my methodology before I would act on it.
Someone mentioned how the slower line lags the faster line by a few candles after it gets to the OB/OS condition. The signal comes when there is a crossover, and hopefully both lines are above 85 or under 15 when that happens. It is an oscillator, so by its nature it lags, but not as much as MACD, which is why I like it more than MACD.
Many times price not react to the OB/OS condition, as Smartrade had pointed out (Ala remaining 3-6 candles in the OB/OS territory.), because of what is going on in higher TF's. After all, the hourly might be OB, but if the 4-hour is wide open still and at the median, that is not the time to take that trade. It would have been if the higher TF reasonably agreed.
It is still best to use the stochastics as a confluence with other indicators.
I took a short on the EUR/CAD today. The accompanied chart shows the stochastics OB, divergence, and even curled over. That still was not enough to convince me. When it hit the top of the 4-hour cloud, and there were some peripheral indications on the daily, that convinced me.
I noticed I missed out on much of the conversation in this thread.
Krishere, the reason you can't thank Smartrade for some of his excellent insights is because he has only made one post in this thread since July, so his posts are too old to thank him.
I wouldn't say stochastics is a cornerstone of my methodology, but I sure like the indicator for various reasons. I use it as a momentum indicator, and it needs to be used as a confluence with other elements of my methodology before I would act on it.
Someone mentioned how the slower line lags the faster line by a few candles after it gets to the OB/OS condition. The signal comes when there is a crossover, and hopefully both lines are above 85 or under 15 when that happens. It is an oscillator, so by its nature it lags, but not as much as MACD, which is why I like it more than MACD.
Many times price not react to the OB/OS condition, as Smartrade had pointed out (Ala remaining 3-6 candles in the OB/OS territory.), because of what is going on in higher TF's. After all, the hourly might be OB, but if the 4-hour is wide open still and at the median, that is not the time to take that trade. It would have been if the higher TF reasonably agreed.
It is still best to use the stochastics as a confluence with other indicators.
I took a short on the EUR/CAD today. The accompanied chart shows the stochastics OB, divergence, and even curled over. That still was not enough to convince me. When it hit the top of the 4-hour cloud, and there were some peripheral indications on the daily, that convinced me.