My Contribution to Jake Bernstein Educational Series, Initiated by Chris Moody.
The Stochastic Pop was developed by Jake Bernstein and modified by David Steckler. Bernstein's original Stochastic Pop is a trading strategy that identifies price pops when the Stochastic Oscillator surges above 80. Steckler modified this strategy by adding conditional filters using the Average Directional Index (ADX) and the weekly Stochastic Oscillator.
Modifications 1. Weekly Stochastic Oscillator for Trading Bias = 5* Daily Stochastic 2. Optional Volume Confirmation, Custom Average Volume Length
Future Plans 1. Adding Triggers for Entry, Stops and Target. - This will be release when we have ability to code the complete Strategy. Although it can be done with the current pinescript options, it would be far more easier if we have strategy ability.
Thanks for taking the time to create this, it is useful to me !
craunico
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Yeah, I just went back and looked at it. He exclaims most traders buy below 25 or 30 and sell above 75 or 80. In his Day trading book on The Stochastic Pop, his approach is exactly the opposite than this. His POP method generates a buy signal when the stochastic indicator is overbought and a sell signal when its oversold. HIs rules are: Use a 9-period slow stochastic %K only with 3-bar smoothing. • Use upper and lower boundaries of 30 percent and 70 percent. • When %K crosses above 70 percent on the close of any bar, then buy on close of that bar. • When %K crosses below 30 percent on the close of any bar then sell short on the close of that bar. • Exit long when %K. crosses back below 70 percent. • Exit short when %K crosses back above 30 percent. • Or use a trailing stop loss once you have a profitable position. ade only during the active portion of the contract in futures and only in actively traded stocks (i.e., average of 1 million shares daily). • Exit trades by the end of the day or on trailing stops or price spikes caused by news or overreactions due to other factors.
UDAY_C_Santhakumar
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cool
chartmojo
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@craunico, Yes agree. I use the Connors RSI with alerts by Milklkm slightly modified will attach a chart. Notice when rsi goes beyond 30-70 stops and reverses and stays beyond them that creates pull on price. The Stochastics pop 1 is a pretty good filter for that, especially at the end of a long trend looking for a reversal. Lately I'm preferring a combined tick at the bottom tick+tickq+tick.us, I'll take a look at this one and see how it rolls. I'm also running a JMA w BG coloring ability off that and candle color qued to levels of the connors rsi. One other thing I run on here not shown is Bollinger band optimized 2 by Shawnz, just with the reversal arrows. It's one of the best reversal indicators Ive found, especially for certain conditions. I usually run a JMA on that combined tick as well. I did a short explanation video of how to use tick/ticks here.
craunico
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I do like what you have shared very much. Thanks again
craunico
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I was thinking he used 70 and 30 for the Stochastic. He was buying above 70 and selling below 30, not quite the standard way most people trade the stochastic.