Talk:Stochastic oscillator

message: I rewrote it so there are no copyright violations. I cited the problematic aritcle with a footnote. Mrdthree 13:30, 5 February 2007 (UTC)
replies: text: In which case, should not the recent deletions (twice, now) by User: AlfonseLaw LLP be reverted? --4wajzkd02 (talk) 17:16, 13 November 2009 (UTC)
thread_title: Copyright violation free rewrite

message: Rumour has it he may not have actually been the creator of the concept, so a neutral title could be best anyway. 
Kevin Ryde 00:47, 11 February 2006 (UTC)
replies: text: George Lane, “In our research, our indicators were running all over the page, so we developed the technique of expressing them as a percentage of 100. We developed %A, found it didn't work. We went on to research and to follow 28 oscillators. As we progressed through the oscillators we were developing, we expressed them as percentages as well; thus: %D, %K, %R. Lane, George M.D. (May/June 1984) “Lane's Stochastics,”second issue of Technical Analysis of Stocks and Commodities magazine. pp 87-90.
*Lane, George C. M.D. (May/June, 1984) second issue of Technical Analysis of Stocks and Commodities magazine. pp 87-90. 
-oo0(GoldTrader)0oo- (talk) 01:48, 25 October 2009 (UTC)
thread_title: Concept

message: All Rights Reserved. Copyright (c) Iseindia.com  Pleclech 22:42, 3 February 2007 (UTC)
replies: text: I have fixed the violation. please withdraw complaint (see temp page) Mrdthree 06:54, 14 February 2007 (UTC)
thread_title:  Copyvio 

message: Why are the letters K and D used?  Do they signify kitty and doggy, or kouphos and dusmathes, or were letters picked at random?  The article would be improved if these letters were given meaning.  Jm546 (talk) 00:16, 19 January 2008 (UTC)
replies: text: George Lane, "We had %A and %B-we went through the whole alphabet twice, working on things. Then we discovered %K and then %D and the darn thing worked. So, we quit the research and went into the pit every day and started making a living." 
-oo0(GoldTrader)0oo- (talk) 01:48, 25 October 2009 (UTC)
thread_title: %K & %D

message: The stochastic oscillator is a momentum indicator used in technical analysis, introduced by George Lane in the 1950s, to compare the closing price of a commodity to its price range over a given time span.
: Excellent.  Clearest explanation that I have seen so far. The stochastic oscillator is based on momentum, support and resistance.  Why would anyone want to "compare the closing price of a commodity to its price range over a given time span?"
-oo0(GoldTrader)0oo- (talk) 02:16, 25 October 2009 (UTC)
thread_title: Support and resistance

message: Allot of our page is taken from a web site at InformedTrades who do not present Stochastics as a complete whole.  They break it down into 3 unharmonious parts for charting and trading.  The parts necessary to get a signal are broken down and acted upon separately.  They appear to have no awareness of the root “Lane’s Stochastics.”  They provide no documentation.  I do not see how it can continue to be used here.
:::Stochastics can be plotted as one, 3-line oscillator with the lines %K, %D, and %D-Slow, shown all on the same chart. 
:::A divergence - convergence, in an extreme area, is your clue to look for a crossover on the right hand side of a cycle, to act.
InformedTrades - “ Let me start by saying that there are 3 different types of stochastic oscillators.”  
:::Well really there is only one. The premium charting packages available for many years let us chart all three lines as one indicator. 
:George Lane - 
::Stochastics may be charted using 3-lines this will give you an anticipatory signal in the first line %K, a signal in the second line of a turnaround in %D, at or before a bottom, and a confirmation of the turnaround in the third line with %D-Slow.  Getting Started With Stochastics, by George C. Lane & Caire Lane 1998 pg 3     
George would not have used 14 periods.
 
InformedTrades - “ the data points which form the %K line are basically a representation of where the market has closed for each period in relation to the trading range for the 14 periods used in the indicator.” 
:::Do you notice something in what George says here?
:George Lane - 
::You can change the numbers of bars being considered in the formula from 5 periods to 8, 13, or any other value.”  
:::George used the Fibonacci number sequence.
InformedTrades - “The %D line is very simply a 5 period simple moving average of the %K line.”  
:::The formula that George used was 5 periods for %K.  When we did calculations by hand a 3 period moving average was used for %D and %D-Slow.  From what he learned from studying MACD, Lane found, and you can test this yourself, that using an exponential moving average for %D, and %D-Slow, improved Stochastics.
InformedTrades - “first way that traders use the stochastic oscillator is to identify overbought and oversold levels in the market.”
:Jake Bernstein - 
::Don’t use the SI for determining overbought or oversold conditions. Jake Bernstein (1998) The Compleat Day Trader II  Pg 17 ISBN 0-87905-656-8
:George Lane - 
::In working with %D it is important to remember that there is only ONE valid signal. That signal is a divergence between %D and the security with which you are working.   Lane, George M.D. , May/June 1984, “Lane’s Stochastics,” second issue of Technical Analysis of Stocks and Commodities magazine. pp 87-90.    
:::Lane stated, this is the only signal, which will cause you to buy or sell. Lane, George M.D. , May/June 1984, “Lane’s Stochastics,” second issue of Technical Analysis of Stocks and Commodities magazine. pp 87-90.    
InformedTrades - When prices close in the upper end of their range in an uptrend this is a sign that the momentum of the trend is strong and vice versa for a downtrend.  
:::The daily range will reach down to support before there is enough selling pressure to close that low.  But as the closes continue lower and support holds, look for the ranges to shrink before the turn.  Stochastics picks this up.  Expect a higher close on the low day. 
:George Lane - 
::As prices move down, the close of the day has a tendency to crowd the lower portion of the daily range. Just before you get to the absolute price low, the market does not have as much push as it did. The closes no longer crowd the bottom of the daily range.  Therefore, Stochastics turns up at or before the final price low.   Getting Started With Stochastics, by George C. Lane & Caire Lane 1998 pg 2  
:William Blau - 
::Stochastics is seen to be very timely with turning points that often lead price turning points.  Momentum, Direction, and Divergence (1995) by William Blau, pg 26 ISBN-10: 0471027294
:::We are looking at the close relative to the low.  On the final low day we get a higher close.  The range between the close and low increases as the bottom is made.
InformedTrades - “Lane recommended waiting for the %K line to trade back below or above the 80 or 20 line as this gives a better signal that the momentum in the market is reversing.”  
:::This is true, some of  Lanes charts show where he has used 25 and 75 and on others 5 and 85, as well as the 20 and 80, publishers choose.  Others have suggested to try 40 and 60 for Stochastic pops.
InformedTrades - “ When the faster %K line crosses the slower %D line this is a sign that the market may be heading up and when the %K line crosses below the %D line this is a sign that the market may be heading down. 
:George Lane - 
::The signal to act on this divergence or convergence comes when %K crosses on the right-hand side of the peak of %D in the case of a top, or on the right hand side of the low point of %D in the case of a bottom.   Getting Started With Stochastics, by George C. Lane & Caire Lane 1998 pg 4   
:Jake Bernstein - 
::Useful in timing, provided one uses the appropriate crossover areas for timing trades. Hot Stock Market Strategies: 5 Secret Investm… (2005) by [Jake Bernstein] pg 57 ISBN-10: 1932531254 
:::This is kind of like having the five period and nine period trend turning on the same close.  You want the momentum of both in your favor when you make a trade.
InformedTrades - watch for divergences .. this is an indication that the momentum in the market is waning and a reversal may be in the making. For further confirmation many traders will wait for the cross below the 80 or above the 20 line before entering a trade on divergence.  
:::When you get divergence, in an extreme area, you can act on the right hand crossover of a cycle low.  Stochastics is to be used with cycles, Elliot and Fibonacci for timing, if you use them.    In low margin calendar futures spreads, you might use Wilders parabolic as a trailing stop.
:::When you put it all together you will see that there is only one Lanes Stochastics oscillator, and only one signal to act is a divergence - convergence, in an extreme area, with a crossover on the right hand side, at a cycle bottom.  Stochastics will get you in at the bottom of a double bottom.
*See: Lane's Stochastics
-oo0(GoldTrader)0oo- (talk) 01:00, 27 October 2009 (UTC)
thread_title: InformedTrades

message: :This is when prices pop through and keep on going.
:Rules:
:Increase long position - When price crosses 80 level from below. 
:Increase short position - When price crosses 20 level from above. 
:Liquidate position - When Stochastic %D crosses %K in direction reversed to open trade.   Jake Bernstein's “The Complete Day Trader. 
-oo0(GoldTrader)0oo- (talk) 01:00, 27 October 2009 (UTC)
thread_title: Stochastics pop

message: (%K) =100 ((closing price-price low)/(price high-price low))
(%D) is a 3-period exponential moving average of %K
(%D−Slow) is a 3-period exponential moving average of %D
-oo0(GoldTrader)0oo- (talk) 17:42, 6 November 2009 (UTC)
thread_title: 3-line

message: Is the claim that the formulae themselves are copyrighted?  If so, is that claim accurate?-FisherQueen (talk · contribs) 17:15, 13 November 2009 (UTC)
replies: text: See Talk:Stochastic_oscillator#Copyright_violation_free_rewrite and User_talk:AlfonseLaw_LLP#WP:OTRS. The user making these claims (a) has not substantiated them, (b) has been directed to WP:OTRS to make a complaint, if warranted, and (c) has been blocked for continuing to edit under his previously WP:UAA-blocked username. I think his reversions are correctly treated as WP:VANDALISM and should themselves be reverted. --4wajzkd02 (talk) 17:19, 13 November 2009 (UTC)
thread_title: Copyright question

message: 'Stochastic is smoother with less false signals' in the figure should read 'Stochastic is smoother with fewer false signals'. 'Less' is very bad grammar, though sadly common, and certainly not encyclopedic. 86.133.51.201 (talk) 17:28, 13 November 2009 (UTC)
thread_title:  Bad grammar 

message: An editor focusing only on this article deleted a large amount of the article, stating in his edit summary that the information was "speculative" (see ,,,,,,). Some of the edit summaries were simply incorrect (e.g., referring to the removal of links as "speculative). In other cases, the materiel deleted had what seemed to be valid references. I undid the changes (which was a little tricky, due to intervening edits), as I was not confident they were done in good faith, given recent WP:VANDALISM in the article's history. More recent editors may want to review the text for completeness and correctness. --4wajzkd02 (talk) 18:15, 15 November 2009 (UTC)
thread_title:  Large blocks of deleted materiel - reinstated 

message: We are looking for:
1. Bullish divergence, in an 
2. Extreme area, with a 
3. Crossover on the right hand side, of a 
4. Seasonal cycle bottom.
Divergence means a divergence from parallel.
-oo0(GoldTrader)0oo- (talk) 11:23, 27 November 2009 (UTC)
thread_title: Seasonals stochastics

message: The formula for stochastic was removed in this edit, among other changes:   I don't have time to fix it right now.  Pfalstad (talk) 20:56, 1 February 2010 (UTC)
thread_title:  Formula missing 

message: The Period (n) unit seems to be arbitrary and not well defined in relation to the chart or scale of the chart. e.g It is not clear wether you should use  days for a weekly chart or days for a monthly chart. Preroll (talk)
:The period (n) seems well defined enough, but perhaps it could be clarified. The article seems to take care not to specify days or weeks or whatever time scale. Period is simply an interval between snapshots of price. The period can be anything, 20 minutes, a day, a year, or even non-constant time intervals like ticks, volume units, or range bars. All that matters is the number of periods used in the calculation. ~Amatulić (talk) 03:24, 16 August 2012 (UTC)
thread_title:  Period - Not well defined.