About long stochastic

Hello traders,
I need some efficient advices from wining traders to improve my very simple forex approach.

all is in the attached sreenshots.
How can i improve the probability to 75% of my long stochastic signal. I turned around around the MAs and RSI, but i can’t find until now…

Waiting for your help.
Regards.




The thing about stochastic is that it’s a lagging indicator, which means that a turn from the overbought/oversold zone or the sell/buy signals are usually late. You could pair this with a leading indicator to get early buy/sell signals though.

I’d echo PipDiddy - personally I use RSI or Stochastic as a confirmation of my instincts on a higher timeframe trade, but I never use either as a reason to enter a trade in and of itself, for the reasons that PipDiddy gave.

There’s nothing wrong with the indicator. It’s doing exactly what it’s programed to do.
You might however experience slightly more success if you used it in harmony with the current dominant directional momentum on the instrument you’re considering trading.

That pair is exhibiting clear bullish momentum.
So instead of trying to short into that dominant flow why not follow the path of least resistance & use the indicator in conjunction with that bullish flow to sniff out potential long entries.

Ignore the short set up signals until the pair is exhibiting clear bearish momentum.
By refining & adjusting how you observe & utilize the indicator you’ll reduce the amounts of premature slip ups & hopefully increase your positive expectancy.

Try that tactic & see how you get on.

Hi there,
Thank you very much to fell concerned by my request.

Yes i know about lagging aspect, but i use it to predict the future move of the market (over bought/sold situation, divergences…). And i feel good with this indicator with the parameters shown on the screenshot for 5M chart only. It “predict” the future move of the H1 chart.

It’s what i am doing now stochastic + MAs and rsi + instinct / feeling. Now I have 50 - 60% winning trades on Zulutrade demo account. And i really want to increase this percentage to 75% because most of the time, my risk/reward ratio is 1:1 but often, i even close the trades before 1:1.

And on my losing example screenshot, where “my” stochastics show a long entry ?

Thank you again to all.
Regards.

Hello there, you are also on zulutrade…Are you sending your signals or you are a followers yourself?

Hello, I am only a provider : ZuluTrade | Next Generation

EDIT : Signal provider, no follower yet.

Man, your trading is horrible! Seriously, how can you at all advertise your signal…I wonder. Hope you manage to fix your performance otherwise nobody will ever follow you.

Lagging in the respect that price needs to move first before the calculation can occur and the indicator be impacted.
But, I do agree with what you’re saying here. I had abandoned using STOCH a few months back and was simply trading price action / supply demand.

I slowly started getting back into using momentum on intraday timeframes, and am pretty much back where I was before I had stopped relying on the indicator. Stochastics are a very powerful tool indeed if you’re using them properly, and not simply buying in “oversold” conditions and selling in “overbought”. Taking that approach will do nothing but drain your bank account and send you to the moon on frustration.

I personally have a few tactics when it comes to trading w/ STOCH.
One, as you mention is divergence (one of my favorites). I like to grade the strength of the signal, which then helps in determining my entry / exit and where I’m going to be setting profit targets.

For example, a simply 1-legged divergence (higher highs in price, lower highs in Stoch or lower lows in price, higher lows in Stoch) is most of the time going to be classified as weak - medium strength (Here’s an example).
2 Points of divergence (highers highs in price, higher lows in price vs. lower highs in stoch, lower lows in stoch and vice versa) typically is medium-strong strength (Here’s an example).

I also like to trade what is called STOCH coils- this is not my original term or strategy, it belongs to one of my personal hero’s - daytraderrockstar - and works really nice to identify a tight constriction in price, with good stoch movement/rotation approaching either OB or OS level in a wedge formation. Here’s an example.

However, all of this is just complimentary to the other aspects of technical analysis which I employ.
I don’t necessarily say that I focus “more” on a “single” tactic of technical trading vs. another - in other words, I don’t give precedence to price action over a stoch signal. Instead, I weigh all analysis equally and use each piece to build a case to enter the market.

My main strategy involves (in [B][U]no[/U][/B] specific order):
-Reading price action live (groups of candles, impulsive/corrective, tech S/R, swap levels i.e. former support/new resistance and vice versa)
-Supply / Demand analysis (identifying zones and placing trades @ levels)
-STOCH (as mentioned above)
-Structure (recognizable patterns- wedges, channels, breakouts, H&S, inverse H&S)
-Logic (setting reasonable profit targets using sticky points)

So, while I do agree that most indicators are lagging by mere nature of what an indicator is, I don’t necessarily agree that STOCH is lagging in its application, if you are using the tool to spot shifts in momentum and capitalize on reversals of prevailing moves.

Jake

Man, your trading is horrible! Seriously, how can you at all advertise your signal…I wonder. Hope you manage to fix your performance otherwise nobody will ever follow you.

Hello, thank you for your great encouragement : )
Yes That’s why i am here to receive help from traders.

I don’t advertise myself, and i don’t hide myself too.

regards.

Thank you very much Jake. I am not available today, but i will study your description tonight or maximum tomorrow.
Thank you again.

Good for you mate, communication is very important in our case! :slight_smile:
I rushed to judge you! Taking it back. It was a simple reaction to seeing many traders actually doing that and then disappearing.

Glad to help.
What do you typically trade? FX, Commodities, Equities, etc?

Who me - forex mate. And I am not trading per-se but more of a copying trading the traders on zulutrade :wink:

Has John added FX to his instrument base?
I thought the closest he came to that was commmodities.

No, I came on Zulutrade to have some external eyes on me. I will NEVER change my account.
In fact, the goal of my question here is to increase my probability and take decision without fear.

My approach is this :
I see a good potential movement coming. 30-50 pips. I take many trades on it. And if it’s a good one, the pips gained are “exponential”.
I am working on this strategy because it’s my nature : “explosif style” in all i do in my life.

Here is an example of what i have done while yesterday night and today.
(see attached file).

I will study the jake’s post to see if i can implement it on my strategy. Sure, i need some help from experienced traders

Thank you toall of you.
See you very soon.

Regards.



Negatory- I only mentioned he trades equities. Not sure if he messes with commodities, as I’ve never heard him speak directly of it. However, I’d bet he trades some ETFs which may track commodities such as gold, oil, etc etc.

You’re familiar with his trading?

I was, but I’ve been out of the stocks loop for quite some time hence my query regards his (current) asset menu.
A mutual acquaintance crossed paths with him a few years back & this guy knew I was a fan of the stochastic, so that’s where the awareness stems from concerning part of his work.

Mr Kurisko is definitely one of the good guys.

That’s legit.
Yes, can’t agree enough on that…he’s a good person and has dedicated his life to helping others learn how to trade. There is so much content of his on the web, it’s amazing.

His methodologies are pretty much universal across investment vehicles…I wouldn’t discourage anyone from thinking they can only trade stocks via his tactics.

That’s why FX is so alluring to those with small amounts of capital to trade with…also, the reason why so many people blow their account. You can leverage the crap out of yourself so easily in the spot market. But, to control the equivalent amount of equities you’d need a large balance or margin borrowing.

How’d you finish this week out, were you able to make any trades off your stochastic strategy?