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Re: Stochastic indicators for MT4

mrtools, Thu Mar 09, 2017 8:27 pm

Kase permission stochastic from the Kate Statware manual.

Philosophy:

Trades taken in the direction of the major trend tend to be more successful than trades against the trend. Thus, it behooves traders to screen trades with a higher time frame filter. Traders are often too impatient to do so. Thus the Permission Stochastic computes a synthetic higher time frame stochastic, which is based on a moving higher time frame window that ends with each bar. For example, a weekly bar is defined as the last 5 business days, ending today. The sped up filter is thus the best compromise between filtering in a higher time frame and minimizing delays in trading.

Interpretation:

Permissioned traders may take long trades when the Permission Stochastic is riding the top of the chart and when Permission K is above Permission D and both are close together. The opposite applies to short trades.

Traders are also permissioned long when the market has been oversold, the difference between Permission K and Permission D is large and Permission K has already turned up. Again, the opposite applies to permissioning short trades.
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