Skillsfirst Level 5 Diploma in Financial Trading (RQF) - Module 4 - Technical Analysis
Skillsfirst Level 5 Diploma in Financial Trading (RQF) - Module 5 - Psychology
Skillsfirst Level 5 Diploma in Financial Trading (RQF) - Module 6 - Risk and Money Management
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STOCHASTIC STEPS

Stochastic Steps records the value of the close of a bar every time the Stochastic crosses. It uses a 21,13,8 setting so crossovers are rare, acting more like a Macd. If price is trending up, each time the Stochastic crosses, it should be doing so at a higher closing value than the last crossover. This defines a trend and critically the correct timeframe to be trading.

A trend can never last forever, but it can move up timeframes, so short term trades develop into long term trades.

The Trend began in May 2005 (fig. 1).

Note on the 30-minute chart the 4 steps (fig. 2), and the 1st step to 4 (fig. 1).

4 steps (fig. 1), the trend moves up to 60-minutes (fig. 2).

4 steps (fig. 1), July sees price move up to the half-day chart (fig. 2).

This time-frame steps 16 times (fig. 1).

The 60-minutes steps 15 times. No market can step forever, so it must move up a time-frame (fig. 1).

4 steps (fig. 1) and a step down (fig. 2). The time-frame switches to daily (fig. 4) and the trend dies (fig. 3).

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