Please help writing a formula for using the stochastic oscillator differently than MetaStock.

The description for the Equis - Stochastic Oscillator – Expert System says:

A buy signal is initiated when the stochastic crosses 20 to the upside. A sell signal is generated when the stochastic crosses 80 to the downside. Buy and sell signals are only generated in the direction of the major trend. (A buy can only occur if the closing price is above it's 200-period exponential moving average. A sell can only occur if the closing price is below it's 200-period exponential moving average.)

I would like to use the stochastic this way:

Buy when the %K line rises above the %D (dotted) line.

Sell when the %K line falls below the %D line.

I searched the forum, but could not find a previous example on how to do this.

Thank you,

Dual Trace

Hi DT, [:)]

Here is what you asked for:

BUYs

Cross(Stoch(5,3),Mov(Stoch(5,3),3,S))

SELLs

Cross(Mov(Stoch(5,3),3,S),Stoch(5,3))

As you will see, you will get too many signals.

There are four types of Stoch(5,3) / Mov(Stoch(5,3),3,S) crossovers:

1. Below the OS level at 20
2. Above the OS at 20 and below the 50 centerline
3. Above the 50 centerline and below the OB level at 80
4. Above the OB level at 80.

My suggestion to you is to apply the basic Equis - Stochastic Oscillator Expert Advisor to your chart(s) for you to learn. Forget about trading for now, you are at the phase of learning.

Paper trade the signals for a few months. Do not hurry these things if you want to begin walking on the right track.

You are at the beginning and you must make sure it's also not the end of your investing adventures. [:)]

If the Expert Advisor works for you at least a bit, get yourself a professional Stochastic based mechanical trading system to reward yourself for having learnt a thing or two about this Oscillator.

Hi there, [:)]

1). I like the way you present yourself, the fact that you are polite and, last but not least, that you are switching from a non-trading profession to earning a living from investing.
I wish more men around the world and more MS users on this forum would be like you … [:D]

2). I am glad you are already paper trading. To me, you are better than I expected … [:)]

3). The way you look at Stochastic is not the best. You need not many signals. All you need is to buy low, sell high.
Do not think that, at your stage now, plenty of signals will bring you plenty of profits! You will be sorely disappointed: the signals will cost you too much apiece.

Hi DT, [:)]

1). No paper trading? You have to take time to understand what you are doing. The alternative is to pay the markets for their harsh lessons. [:@]

If you trade with the help of Stochastic, that’s fine, but how about you paper trading MACDs in parallel?

2). No money? You have to do whatever it takes to start trading on the right foot. It is an insult to the markets to open a trading account with little money because it forces you to do little trading.

3). Buy house and then have no capital left for trading? Many traders use the markets like the Bank’s ATM: they take profits out to pay for monthly bills, cars, family, etc.

That’s very wrong because it shows they are cultivating the bad motivation. One has to trade to respect the trading rules he freely chose, not because he must pay bills.

One has to trade to win, not to decimate profits.

4). The ultimate goal is to trade for an elegant living. One who keeps a job or runs a “business” and stresses himself out to trade is bad. It shows disrespect for the markets. Everybody is free to do what he wants, but in most cases, what one wants is not the way of the scorer.

Trading is not something like fishes jumping on dry land.

5). I am glad you managed to make it to today. I wish you to find energy and inspiration to continue. Exceptional results come only to exceptional people. Good luck.