Jake Bernstein, a famous future analyst interviews with Dr. George Lane, the man who invented Stochastic Oscillator 50 yrs ago.
Download this,
http://69.176.104.70/jbnl/Copy%20of%20mbh050620.pdf
My findings,
1. Stochastic oscillator indicator, short named SI, invented many years ago only popular until a future analyst, Jake uses it a NEW way.
2. Jake mentions that, if a trader trades stock with %K, Sell when reaching overbought and Buy when oversold region, the traditional method introduced by Dr. George, most of the time the trader will face loss!!
3. Jake suggests trading the reverse way. BUY MARKETS THAT ARE “OVERBOUGHT” and SELL MARKETS THAT ARE “OVERSOLD”.
4. With configuring some Stochastic settings, this new method is named as Stochastic Pop method.
How to configure Chartnexus into Stochastic POP method
1. %K is the Closing price position in % over 14 period highest high and lowest low range. The fastest mover of a 3-line Stockhastics. (Action: No change)
2. %D, is the 3 period SMA or EMA of %K, or 3 bar smoothing of %K. (Action: Change this to 5 bar period.)
3. Smoothed %D, is the 3 period SMA or EMA of %D, or 3 bar smoothing of %D (Action: Change this to 12 period)
Rules to follow
In Chartnexus
* When SI goes above 75% level then BUY
* Exit when %D and Smoothed %D cross
* When SI goes below the 25% level, then SELL
* Exit when %D and Smoothed %D cross
In other chart analysis with Fast, Slow or Full mode, use the Slow mode.
* When SI goes above 75% level then BUY
* Exit when Slow %K and Slow %D cross
* When SI goes below the 25% level, then SELL
* Exit when Slow %K and Slow %D cross
