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Clyde is a FF fan and uses it in his geology
analysis for oil drillers. I have never been a fan of it for price
analysis because my experience with it on Telescan years ago was not
encouraging. Attached is another example in the third plot down of a dual
stochastic where one period is based on 0.5 of the Hilbert (Magenta) and the
other is based on 1.0 Hilbert period(Yellow). The idea was that if there
is going to be a trend change it might show up in the 0.5*Hilbert before the
1.0*Hilbert. Note the recent crossing of the Magenta below the Yellow,
possibly suggesting a topping phase? Stochastics will get you if
misinterpreted. Remember that overbought and oversold are misnomer mind
constructs that price doesn't really care about. In the case of
stochastics they can also mean trend mode. That is the virtue of the
adaptive stochastic in that trend mode really means an increasing cycle length
and the plot then hangs onto the "overbought" or "oversold" levels. The
classic stochastic is prone to giving false buys and sells.
bobr
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----- Original Message -----
<DIV
style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black">From:
c_r@xxxxxxxxx
To: <A title=realtraders@xxxxxxxxxxxxxxx
href="mailto:realtraders@xxxxxxxxxxxxxxx";>realtraders@xxxxxxxxxxxxxxx
Sent: Sunday, October 28, 2001 9:33
AM
Subject: Re: [RT] Adaptive
Stochastic
Bob, Thanks
for the screen shot. I've examined the AS on a number of the charts you
have posted and have been impressed with its ability to catch changes in
trend. I used to run Fast Fourier analysis to extract cyclic info (EOD) and
use that data to set lengths for the stochastic, MACD, etc. This usually
required running the FFT once a month to identify significant changes in cycle
length and re-setting the indicators. And there's a lot of noise in the
indecies and their trading
vehicles. I've
been working as a geologist for the last several months and have been saving
bits of code and discussions from RT and get traders and the like.
Naturally the one time I want to go back and work with a new indicator, the
grinch in the hard drive ate it.Thanks again,Charles
MarchandAt 08:07 AM 10/28/01 -0800, you wrote:
Here's a
shot of the Adaptive Stochastic on the daily INDU. It seems to do a
decent job of catching turningpoints as cycle length changes and to also
stay saturated as an up or downtrend develops. The adaptiveness refers
to cycle length change which then adjusts the High to Low reference used in
calculating the stochastic. It is a cool indicator. Clyde Lee
did a great job as usual in putting it all
together. bobr
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Sent: Sunday, October 28, 2001 7:59 AM
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