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caseyqn18
07-16-2015,
Stochastics
by greencat

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A technical indicator that compares where a security's price closed relative to its price range over a given time period. The sensitivity to market movements can be reduced by adjusting the number of time periods or by taking a moving average of the result. This indicator is calculated by using the following formula:

%K = 100[(C – L14)/(H14 – L14)]


C = the most recent closing price
L14 = the low of the 14 previous trading sessions
H14 = the highest price traded during the same 14-day period.




The theory behind this indicator is that, in an upwardly trending market, prices tend to close near their high. Whereas, during a downward trending market, prices tend to close near their low. Transaction signals occur when the %K crosses throgh a 3-period moving average called the %D.

Thats all greek to me. As many of you may know this is one of my favorite indicators. Almost every chart I post has a reference to the stochs. I look for trends where the stock has bottomed and sold off at before. I look for the crossover for a change in the current trend and a possibe entry point. But again there are other factors before I just pull the trigger.

Lets take a look at microsoft. I bought microsoft on monday and sold thursday. I didn't make a lot of money but I made some. MSFT was an easy call so plese check out the chart and it shows you what I am talking about. If you want to look at a similar chart check out NOK nokia.

http://tinyurl.com/ch96g

Carminepr
07-17-2015,
I read stockcharts bit and basically what I got was that you wait for two consecutive moves above or below the 80 or 20 respectively before you can determine if a reverse trend is about to happen but that it's not always the case.

I looked at the stochs on the linked chart example. I was able to see that on the slow stoch somewhat but the fast stoch is just too whipsawed for me to make heads or tails out of for any indicators. I realize these things have to be looked at with other indicators. But stochs seems a tough one to get any indicators from for me. The full stoch looked exactly like the slow stoch so I don't really see where those two are used in coordination with each other. But I have to read some more on stochs. They seem a little more complicated for me to grasp than RSI which I find myself looking at alot for overbought and over sold signs.

Cassey
07-19-2015,
looks like someone has been studying. great observation! i will watch fast sto but it is low priority for me on indicators but it helps in that it is just another comformation of change. i found for me while learning is work on one indicator at a time and as i get the grasp of them like you have on the sto's i ad them to my charts. good job money!

Cameronlomi
07-19-2015,
Thanks Paul. That's just it though, I don't feel I'm getting a comfortable grasp of stochs. maybe I'm making them too complicted, lol. Too many factors involved to remember like %K and %D, and variations on those, fast and slow and full, ugghh lol.

You said you don't watch fast sto too much. So, the slow sto is what you favor?! I can see how the slow is easier to read at a glance since it is a smoother line, What about full? Also, would you say that stochastics and RSI are kinda redundant? I read where it's not necessary to use alot of similar indicators together.

I would however like to gain a better understanding of how to read stochs. I'll keep reading up and hopefully like you've said it'll click. Guess I need to read alot of different sources on this stuff.

candyfv60
07-20-2015,
Quote:
Originally Posted by lovemoney View Post
Thanks Paul. That's just it though, I don't feel I'm getting a comfortable grasp of stochs. maybe I'm making them too complicted, lol. Too many factors involved to remember like %K and %D, and variations on those, fast and slow and full, ugghh lol.

You said you don't watch fast sto too much. So, the slow sto is what you favor?! I can see how the slow is easier to read at a glance since it is a smoother line, What about full? Also, would you say that stochastics and RSI are kinda redundant? I read where it's not necessary to use alot of similar indicators together.

I would however like to gain a better understanding of how to read stochs. I'll keep reading up and hopefully like you've said it'll click. Guess I need to read alot of different sources on this stuff.
i like the fast on 15 minute and ussually dosnt matter to much on the daily. way i studied a lot of the indicators was just type in a search on google Stochastics and read all i can find. each sight tells a little something more to really get a grasp on things. gary likes sto's better then rsi i like to see both