Can someone that uses stochastics please help me. I ‘stochastics settings forex cargo been playing around and modifying the settings for a “smoothed out” slow stochastics settings.
I was at one of the free previews for “Teach Me To Trade” a few years back, and they had a nice “smoothed out ” curve. Does someone know what parameters they used or can someone recommend some effective parameters to “smooth out” the stochastics. It is not just a question of smoothing out the stochs, but also whether such smoothing produces meaningful signals. Or you can optimize for specific markets and time freams. 21 3 for medium term and 5,3 for short term.
A successful day trader I knew used 20, 12, 9. Nice smooth result, but I haven’t managed to repeat his success. He used to target divergences which would give him c30 point moves. I like to use 14,3,3,SlowD on a 5min DAX chart mixed with price action. Doesn’t look too bad either on the Mini Dow, Stoxx50 and ES Mini, but they need more work. IMHO I think you should stick to one setting and work with it rather than keep optimising. I agree that optimising is a waste of time.
I do find that the standard settings of 21,3 and 5,3 are best. You opnly need 3 periods for the slow stochastic which I don’t use. May I ask what you trade and what time frame you use? I’ve found that stochastics on a very short time frame can be too ‘whippy’ whatever the settings!
I trade short term with the medium term in mind. I trade with the trend and use the stochastics to pick the best times to enter. I don’t use tjem for buy and sell signals because then they are too whippy. As a professional trader spending hours on hours per week looking at charts, you start to develop a technical vision which unconsciously lets you see cardinal points in the market, overlooked by the untrained eye. After working with it manually for several years and taking very nice profits from the market, I have started the phase where I am trying to automate my rules of trading as much as I can.
Pips Carrier is one of them. A late night dinner with a dear friend led me to a decision. Why not publish it and let others enjoy it as well, and, more importantly, profit from it? In addition, releasing this system goes hand in hand with my primary goal, which is to increase the level of trading for many traders out there.
Pips Carrier, which turns out to be a piece of cake even for beginners, allowing them to produce amazing results right from the start. My belief is that even a trader who uses technical analysis must understand the basics of the indicator he uses in his day to day trading. The first indicator I want to talk about is the MACD indicator. MACD stands for Moving Average Convergence Divergence. It is a very important indicator.
The MACD indicator consists of 2 moving averages and a histogram. The one you got with Pips Carrier follows the classic form of the MACD. Zero level is the most important level of this histogram. You notice that the histogram consists of several slopes. A histogram’s slope determines the current direction of the market. If a histogram is above zero level and its slope is facing down, this is a sign that the market is expected to decline.
If a histogram is below zero level and its slope is facing up, it means that market is likely to go up. Then we want it to start declining towards the zero level. After it nears the zero level, we want it to reverse and go up again. This situation indicates that the market is on its way to a reliable uptrend, one that will allow us to join it. Then we want it to start rising towards the zero level. After it nears the zero level we want it to reverse and go down again.