as stated before, indicator “values” were most likely optimized for the particular trading conditions and timeframes that the designer or creator figured to work ---- most of the older ones have been “tweaked” for years and the settings arrived at are probably the best “average” one can come up with for the “average” conditions.
NOW, if you know that you shall be dealing with a non-average situation, you can modify the values accordingly.
in the example of the stochastics of using 10/3/3 instead of 5/3/3 you can see that the 5/3/3 will REACT much faster to changes in the market, and therefore ALERT you to a trade faster ---- by the same token, as stated below, it will also “whip” if the market is “whippy” much faster than the 10/3/3.
what SOME traders do is to have BOTH (although they would use 14 or so instead of 10) so they can cover the whole move, from the moment it begins to its logical conclusion and not be influenced by any erratic movements of the 5/3/3 (much as a man will have a wife and a mistress — for differing reasons but usually leading to the same outcome)
if they are put on the SAME panel together, one can actually use a cross over system that works nicely, although i would pay more attention to the 5/3/3 crossing its OWN signal line to originate a trade.
PLEASE understand, while what ive described WORKS, it is NOT THE ONLY FACTOR in taking a trade, but at least its a good start – as you progress, you shall meet candle formations, bounces or breaks of support and resistance, trend lines and channels and a whole bunch of things that youve never met before ---- if you stick with the tried and true indicators, at least youve got a good step in the right direction.
to those who think indicators lag, they do well enough right now for me to make a total of pips in one day, on a few accounts, that would leave most gasping in astonishment, using NOTHING but indicators and some pretty messy charts that contain the info i need — i do this on a few accounts and NEVER look at what shape a candle has taken or what a few of them together are saying.
its all in the indicators, support and resistance and a few trend channels, and while a bit above normal pip school, its one of the ways good retail traders work.
enjoy and trade well
mp
[I][B]Within the great hall at Elfinore stands a wondrous coffer, precisely four cubits square and securely latched against the outside world. Inside that repository, shut away from impertinent eyes, abides many an intriquing trading secret garnered from around the world and over the ages !
As a child, i used to watch from the darkness as the secrets were debated and annotated by the elders. No one there held a single thought of my presence – BUT I KNOW WHERE THEY HID THE KEY !!
[/B][/I]