Morning all...

[rossored]

Is anyone able to recommend any books / websites that give an understanding of stochastic charting techniques, how to draw them (i've borrowed a book by Jake Bernstein - anyone heard of him? -but its not very clear) and whether or not they are a reliable tool for understanding market trends or not. Is there a more preferable tool for seeing turns on a price or is stochastics one of the better ones??

as usual, any help anyone can give is much appreciated.

By the way, the photo section proved useful recently : was in my gym and saw this guy who looked familiar - turned out to be another trader I'd seen on here - most amusing to both of us!! 😎

Cheers for now,

RR

 

[Helenqu]

Hi RR,

I like stochastics, particularly for marking turning points in trends. I don't however know of any books that tackle the subject very well. I'm currently using them for Dax trading on a 30 min chart. Seems to work quite well so far.

 

[Skimbleshanks]

I've got a couple of Jake Bernstein's books, and I know what you are referring to - (too lazy to look it up) something about having that extra zip up after the fast stochastic has crossed the 80 line.

Like virtually everything you read about, it sounds good ... but trying to use it to trade is a totally different matter. I looked back at a few trades and realised that while it works well in principle, there are loads of times when you would have been whipsawed out. But of course you may be using a different time frame, etc, so whereas it was a waste of time for me, it might end up being your holy grail!

People who use indicators, such as stochastics, appear to use more than one - an early warning one, and then one to determine entry. But don't bother listening to me because I don't use indicators.

 

[davelong]

Hi Skimbleshanks,

I have been back to your post twice before this, to post a reply, but did not. However, even at the risk of appearing a complete twit, I have to ask the question : If you do not use indicators what do you use ( if you don't mind me asking) is it S/R, patterns, MAs etc.?

regards

David

 

[Skimbleshanks]

Hi davelong - you're not a twit for asking. Perhaps I'm the twit because I trade unlike anyone else on these boards.

I use price bars and volume on 5 and 10 minute charts - nothing else.

My entry points are based either on support and resistance, or what the bars are telling me. I also flip my trade at s/r points as I am in the market most of the time.

 

[suggy]

is there a specific reason you don't use indicators skim?

 

[Skimbleshanks]

Indicators lag. Price and volume don't.

 

[sidinuk]

Hi skimbleshanks,

I agree with you that indicators tend to cause more problems than they solve.

However if you flip your trades at s/r how do you avoid getting multiple whipsaws when the market is indicisive around a s/r line? The market rarely bounces precisely off a trend line and will often just slip through, take out the stops behind it then reverse.

cheers

Tim

 

[Skimbleshanks]

I use horizontal support and resistance, not angular trendlines - and I know the likely distance used to take out the stops, so I put my stop just outside that.

The placing of stops is an art, not a science. And that is the key.

 

[options]

"Perhaps I'm the twit because I trade unlike anyone else on these boards.

I use price bars and volume on 5 and 10 minute charts - nothing else."

Not so Skimmy. Our trading styles are remarkably similar, only I use 1,5,and 15 frame charts. I shy away from indicators because of the lagging effect. Price bars, sup and res are all you need. But I only have volume on the 5 and 15 chart otherwise it tends to be unreliable over the very short term. (for Liffe anyways).

It does seem to be an alien concept on here though. But I find you can get a better 'understanding/feeling' of price movement by just watching a 'clean' chart.

That's not to say that I don't have charts in the background with a few favourite indicators on them, but in practise these tend to get ignored to a great extent. And having said all that my favourite trading chart has 3 lines on it and nothing else.

That may sound like a bit of a mish-mash but I have open views on just about anything except elliot (but I embrace the theory)
And try to take the best bits that suit me. which wouln't work for another trader. I even believe the moon plays its' part at certain times. though I haven't been able to study this as much as I have wanted to.

Good health Skim.

Options.

 

[Skimbleshanks]

Ahhhh ... a fellow believer in naked charts :cheesy:

 

[FTSE Beater]

....and you can add me to the some what exclusive club 🙂

Although CCI has slipped in under the cover of darkness :cheesy: