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To: Warpfactor who wrote (12831)	3/11/2002 8:53:30 AM
From: chowder	Read Replies (2) \| Respond to of 23153

Warp, you've looked into the Stochastic Indicator far more than I would have. I try to keep things simple. The simpler it is, the more effective it is, in my opinion. I use the Stochastic to let me know if a stock is overbought or oversold. I prefer to short from overbought, I prefer to go long from oversold. I use the Slow Stochastic but again, I merely want to know where the stock stands. I also use the standard parameters. How did I know JNPR was a buy? I looked at the weekly chart over the weekend. I saw a double bottom and a possible bullish reversal pattern. I decided to watch the open on Monday. The stock opened up and continued higher. The volume confirmed the uptick in the price. The Stochastic was also at a low. When you combined all of the clues, it seemed like a good risk vs reward play. stockcharts.com[h,a]waclyiay[pb10!b50!b200!f][vc60][iut!Lh14,3]&pref=G I prefer to get three or more indicators going in the same direction, at the same time, before entering a trade. dabum

To: Warpfactor who wrote (12831)	3/11/2002 9:43:26 AM
From: RWS	Read Replies (1) \| Respond to of 23153

Warp, Not much time today, but a few thoughts on stochastics. Since it really tells you whether the price is tending to close near the highs or lows, it is not a realiable signal standing alone. One can use RSI and bollinger bands in conjunction to judge whether stock is buy or sell. A high stochastic is not necessarily a signal the stock is overbought. It may be "oversought" with demand outstripping supply. Since it is a periodic oscillator, the period you choose needs to bear a relationship to the periodicity of the price action of the equity. I believe it should be twice the distance between a high and low. I like to use fibonacci numbers for all my periodic oscillators. They seem to work best. If you'll look at the charts I posted at the yahoo user group, I use the 21,13 for daily stochastics to find significant pivots. It usually works. For trading entries or exits I use the 21,8. On the weekly charts I use the13,8. There also seems to be some shift in the oscillator bias between bear markets and bull markets, with the stochastic tending to stay higher during bull and lower during bear. The 89,3 gives you the trend above and below 50. Regards, RWS

To: Warpfactor who wrote (12831)	3/11/2002 1:10:42 PM
From: MetalTrader	Respond to of 23153

I haven't had much time to follow the board lately, but thought I'd chime in on stochastics for a moment. I use them heavily but saw many investors get eaten alive by them when the market turned in 2000. As a trading tool, they are good. As an investment tool they often need to be understood better. I saw many investors buy the dips on the basis of stochastics and continue to do the same after the uptrend was broken. The trend is my foremost tool for investing, stochastics for timing and trading. A trendless market is ideal for stochastic swing trading, and that's what we have until further notice. Buy on low stochastics and on chart support. Sell on high stochastics and chart resistance. mt