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2004issue C091-4

Simple dual confirmation for a short-horizon index-futures system

A historical short-horizon design places a Stochastic oscillator and a Moving average on one-minute and three-minute charts so the two differently calculated series can be read together. A higher-potential setup is defined only when both series confirm a Price-indicator divergence against price at the same time.

  • A short-horizon design can place a Stochastic oscillator and a Moving average on one-minute and three-minute charts so the two differently calculated series can be read together.
  • A higher-potential setup is defined only when both series confirm a Price-indicator divergence against price at the same time.
  • Those dual-confirmation entries are paired with a maximum stop of two points or less and a preference for more winning trades than losing trades.
  • Shorter charts are used so small completed swings stay available, because waiting for confirmation on five-minute or longer charts can let a four-point one-minute move finish first.
Entries in this reading3 entries
Stochastic oscillator19 readingsMoving average30 readingsCurrent trackPrice-indicator divergence35 readings

Read two differently calculated series together

A short-horizon design can place a Stochastic oscillator and a Moving average on one-minute and three-minute charts. The two series are calculated differently, and they are read together on those charts.

Define a setup only by dual confirmation

In that design, a higher-potential setup is defined only when both series confirm a Price-indicator divergence against price at the same time.

Pair confirmation with a small stop

The same design pairs those dual-confirmation entries with a maximum stop of two points or less. It also states a preference for more winning trades than losing trades.

Keep small completed swings available

Waiting for confirmation on five-minute or longer charts can let a four-point one-minute move finish before the signal appears. Shorter charts are used to keep those small completed swings available.

Avoid two opposite design failures

Complexity and black-box automation are treated as opposite design failures. Stacked rules force guesswork when one element fails to line up. Fixed historical programming cannot adapt when market dynamics change.

Educational research material, not investment advice. Historical source context does not establish present-day performance.
20 of 32 in the Price-indicator divergence track
20051-4 pp.Next on Price-indicator divergenceConfirm a stochastic divergence by reclaiming the first-swing barOscillator disagreement can flag a possible top or bottom, but it does not establish that the turn is complete.
All readings on this track · 32 readings
  1. 1989Volume confirmation windows and exponential average construction
  2. 1990Constructing stochastic %K and %D from range position
  3. 1990Build a weekly leading sector composite from scaled transports and financials
  4. 1990Constructing stochastic K and D lines and divergence cues
  5. 1993Relative strength index events depend on the chosen input combination
  6. 1995Constructing a dual-horizon force index
  7. 1996Building a range-normalized divergence index from relative strength index
  8. 1998Treat RSI as a testable filter rather than a trigger
  9. 1999Primary-cycle windows, then stochastic confirmation
  10. 1999Stochastic rules versus buy and hold
  11. 2001Constructing confirmation filters for RSI overbought and oversold extremes
  12. 2003Constructing divergence-equivalent relative strength index and stochastic oscillators
  13. 2003Reverse-engineered RSI as a next-close projection
  14. 2003Scoring open versus resolved relative strength divergences
  15. 2003Bull-and-bear-balance from OHLC bar patterns
  16. 2003Constructing bull and bear balance from session paths
  17. 2004Four-month rule: auto stocks as a market-regime warning
  18. 2004Constructing stochastic oscillator bands, crosses and divergence
  19. 2004Volume as an independent check on price oscillators
  20. 2004Simple dual confirmation for a short-horizon index-futures system
  21. 2005Confirm a stochastic divergence by reclaiming the first-swing bar
  22. 2005Weekly stochastic divergence and a long average on 2005 high-yield entrants
  23. 2005Predicted averages from related market baskets
  24. 2006Rank price-oscillator divergences, then filter by trend
  25. 2006Relative-spread-strength for cycle confirmation
  26. 2007Weekly breakout stretch and histogram divergence
  27. 2011A luxury-auction stock as a cross-market bubble warning
  28. 2014Running-percentile close divergences and trend filters
  29. 2015Rebuilding the relative strength index from close-to-average gaps
  30. 2016Constructing higher-high and lower-low stochastic pairs
  31. 2018Constructing composite relative-strength-index stochastics for reversal confirmation
  32. 2019Building a smoothed Stochastic oscillator of the Relative Strength Index for Price-indicator divergence checks
By fieldSystem design8 readingsBy year200412 readings
All 35 readings tagged Price-indicator divergence
Also on Price-indicator divergence5 readings
2005Weekly stochastic divergence and a long average on 2005 high-yield entrantsStochastic oscillator2016Constructing higher-high and lower-low stochastic pairsStochastic oscillator2019Assigning jobs in a stochastic, parabolic, and moving-average stackStochastic oscillator2019A three-filter stack as a redundancy testStochastic oscillator1990Constructing stochastic K and D lines and divergence cuesStochastic oscillator