green green, page-157

'Appy Noo Year mongombolo & other regular BHP posters

Mongombolo, I note your recent post; "David, I use only the slow stochastic, k 14, d 7."

I have something of a love affair with Mathematics & FWIW IMO from practical checking of the Slow Stochastic it seems to be more useful than most other indicators - although I freely admit I have not undertaken a statistical analysis & that as with others the Stochastic is a lag indicator.

After considerable checking / re-checking from the viewpoint of an investor_trader [my trades average 3 months duration] for accuracy against SP trend changes I have settled upon:
k=50:d=30 for the daily charts; k=15:d=9 for weekly charts & k=5:d=3 for monthly charts. In ProfitSource the default setting is k=5:d=3 [better suited to shorter-term traders].

I find that of greatest value is when both the stochastic indicator & its moving average are above 80 - relatively uncommon for this situation to continue for months at a time => holding on at that point is a high stakes gamble IMO. The reverse is also apparent [ie. Stochastic & moving avg below 20] but rallies have been somewhat subdued as a result of the Global Meltdown [Al's Climate Change struck Share Markets first it seems]. Indeed it seems some stocks have maintained almost '0' for several months!

4YIO - NFA