10.4 A Complete System

[mjws00]

I saw bob talking about Stoch 5,3,3 as a RSI2 replacement. Who is using it instead of RSI2 ?

I've only used the Stoch version from the v1.02 template. I have traded this for 2 weeks and paid VERY LITLE attention to it this last week. Even so, I've increased a $500 demo account to $547; nearly a 10% increase.

I've not made anywhere as many trades as most here. I have looked at several of the 10.4 meters (including yours) almost exclusively to decide to enter or not. I look at the chart that the meters have shown to be potentials if it looks good and 240 is not "too far" (this is subjective) then I place a pending.

I kind of like the idea of having both Stoch and RSI on the same meter.

CT's dashboard has both. Rebyte2 just added the stoch to his indicator at the bottom for comparison, it looks nice as well.

Short period rsi(2) on slope is interesting because it basically functions as a switch. It has interesting behavior as an oscillator. It switches early and sticks. It is cool as a heads up. But useless on the H4 for any sense of when price might turn. It is sensitive coming in, slow to leave.

Short period stoch on price, just flies back and forth in faster waves. We are just clipping the signal, to avoid getting sucked in, by it's false return signals. There is different math at work. One is reading advance vs. decliners of slope bars, and smoothing. The stochastic is a play off relative strength of price directly, it's characteristics are well known (and don't capture my imagination).

Both tools are deadly in the hands of skilled operator. I like stoch, but have seen it for decades and can't be bothered with it. I know other systems have used the short RSI(2) directly on price, but its application here I found interesting.

I'm lovin the original as I find it's behavior useful and innovative. Stoch 5 is a quick hack to save cpu cycles. You must filter by eye and experience and we are using a trick to clip it and hide useful information from ourselves. To me it is an approximation of a signal that is really quite striking. A body kit doesn't make a Honda an R8.

Two bits. This will be a personal preference thing.

Mike

[lhDT]

Short period rsi(2) on slope is interesting because it basically functions as a switch. It has interesting behavior as an oscillator. It switches early and sticks. It is cool as a heads up. But useless on the H4 for any sense of when price might turn. It is sensitive coming in, slow to leave.

What do u mean exactly by "useless on the H4" ?

[mjws00]

Short period rsi(2) on slope is interesting because it basically functions as a switch. It has interesting behavior as an oscillator. It switches early and sticks. It is cool as a heads up. But useless on the H4 for any sense of when price might turn. It is sensitive coming in, slow to leave.

What do u mean exactly by "useless on the H4" ?

Only that it cannot be used as a signal for entry (and we aren't trying too). In a perfect world it would show us when to place pendings or enter when it exited OB/OS. When RSI2 pegs up you only know that you will be riding up for a while... it will never give a sense of when that turn might happen. It can twitch and give clues.... but it isn't that strong in it's native TF.

It shows very strong OB/OS but is incredibly late (due to it's nature) at showing when price might be turning. If you bump it down to M30 or 1H, it actually functions reasonably well as a trigger for entry as well. But at that point requires filtering as it is behaving more like a traditional oscillator.

Mike

[mjws00]

You guys can feel free to ignore my over analytical side. I truly love this geeky stuff so take it with a grain of salt.

[lhDT]

You guys can feel free to ignore my over analytical side. I truly love this geeky stuff so take it with a grain of salt.

Why ? I like it
Just as the week-end observation I saw this with H4 & Stochs 5,3,3 : When stochs goes overbought (above 30, so topping), you place a pending short at the low of the first OB bar.

[mjws00]

Pictures like that make me smile. Look at all the losses though if you were long above the 240 with that signal on the prior days. And around the 240. In a trend that idea will crush it as you get in on all the pullbacks, chops and turns will be painful. Playing one side of an oscillator in a trend will always work. It the other bits that are tricky.

I really love to see how people are starting to define and refine possible entries and pendings with this framework. Very very cool guys.

Mike

[Ray Singcar]

removed

[nanningbob]

Hello, thanks Bob and all for the 10.4 ,
I wont be trading your system but I have enjoyed reading how you came to this point in trading.
I've stolen your MA and placed it on my charts as I was already a pivot and PA trader.

I hate it when people change systems without giving it a chance to work but as you are toying with ideas still I have a suggestion that you could implement. The indicator comes free with every Empty4 so new coding. It's the CCI indicator.

In uptrends I treat the falling below -100 as a reload and in down trends I treat the rise above 100 as a reload.

Hopefully the chart attaches ok to explain what i mean.
http://content.screencast.com/users/fol ... -chart.gif

Thanks for the suggestion. I will be looking at this one today along with the Laguirre indis. I had about a dozen of those sent to me and will have to some studying. I hope to send a rough version to Steve soon of 10.5 scalping system. That one will be very clear cut in entrances and exits with multiple levels.

[nanningbob]

Pictures like that make me smile. Look at all the losses though if you were long above the 240 with that signal on the prior days. And around the 240. In a trend that idea will crush it as you get in on all the pullbacks, chops and turns will be painful. Playing one side of an oscillator in a trend will always work. It the other bits that are tricky.

I really love to see how people are starting to define and refine possible entries and pendings with this framework. Very very cool guys.

Mike

I am not sure by what you mean by all those losses. I see one valid trade that would have moved into profit for a short time and then come back to hit a SL. depending on how you played that move it would have been a win or loss. If you are referring to the movement around the 240 line, you probably would not be making those trades so I wouldnt even be counting them. In fact you really dont have a reason they would have even entered a trade because they look like they dont move high enough to enter off of a S/R line anyway. That is why we use pending trades because we want to see enough movement first before entering a trade. I dont see enough movement for that.

[rebyte2]

Pictures like that make me smile. Look at all the losses though if you were long above the 240 with that signal on the prior days. And around the 240. In a trend that idea will crush it as you get in on all the pullbacks, chops and turns will be painful. Playing one side of an oscillator in a trend will always work. It the other bits that are tricky.

I really love to see how people are starting to define and refine possible entries and pendings with this framework. Very very cool guys.

Mike

I am not sure by what you mean by all those losses. I see one valid trade that would have moved into profit for a short time and then come back to hit a SL. depending on how you played that move it would have been a win or loss. If you are referring to the movement around the 240 line, you probably would not be making those trades so I wouldnt even be counting them. In fact you really dont have a reason they would have even entered a trade because they look like they dont move high enough to enter off of a S/R line anyway. That is why we use pending trades because we want to see enough movement first before entering a trade. I dont see enough movement for that.

Because i'm seeing LHs and LLs and the 240 bending down.... personally, i would not be looking for any longs. I'm referring to being on the top side of the 240.

This would even be, before hindsight.