Skip to main content
Track Average Directional Index
19 / 56
Search the archiveLibrary
Library

2000issue C081-8

Stochastic pop as a filtered continuation setup

A stochastic pop treats a high oscillator reading as continuation only when a tight range, weak average directional index, an above-average-volume breakout, and higher-timeframe confirmation all fire as one entry procedure.

  • A stochastic pop is price continuing higher while the stochastic stays above the 70 to 80 area instead of reversing.
  • Daily entry waits for a tight recent range, daily ADX below 20 and preferably below 15, rising daily %K above 70 and preferably above 80, weekly %K above 50 and rising, an above-average-volume breakout, and a bullish backdrop.
  • Average directional index is scored from directional movement and true range so it can mark a quiet market before the breakout.
  • The procedure waits for that defined opportunity, participates while upward momentum persists, and returns to cash when that momentum fades. Outcomes are not guaranteed.
Entries in this reading3 entries
Current trackAverage Directional Index71 readingsStochastic oscillator170 readingsRule-based entry174 readings

What a stochastic pop is

A stochastic pop is a breakout setup in which price continues higher while the stochastic oscillator remains elevated rather than reversing from a high reading. The archive defines that condition as price continuing higher while the stochastic stays above the 70 to 80 area instead of reversing.

The daily entry checklist

Rule-based entry is the multi-condition checklist that defines when a trader may enter, stay out, or later step aside. The daily setup requires a tight recent range, daily average directional index below 20 and preferably below 15, daily stochastic %K above 70 and preferably above 80 and rising, weekly %K above 50 and rising, an above-average-volume breakout, and a bullish market backdrop.

Every item belongs to the same procedure. If the quiet range, the weak daily average directional index, the rising high %K readings, the volume breakout, or the bullish backdrop is missing, the rule is to stay out.

How average directional index is scored

Average directional index is a trend-strength measure built from directional movement and true range, used here as a quiet-market filter before a breakout. Directional movement is the portion of a bar that extends beyond the prior bar, counted as up, down, or none.

Directional movement is scored as up, down, or absent by comparing how much of the current range extends beyond the prior range, and is zero when the current range is inside the prior range. True range is the largest of the current high minus low, the current high versus the prior close, and the current low versus the prior close. True range scales that directional movement.

When a double-pop confirms

A double-pop is a rarer variant in which weekly and monthly stochastic readings also confirm after the daily setup appears. In one illustrated case, a weekly ADX of 22.80 with weekly %K at 77.37 and monthly %K at 91.47 was treated as a double-pop confirmation after the daily conditions appeared.

How the procedure is used

The procedure is presented as an aggressive, time-in-market tool that waits for a defined opportunity, participates while upward momentum persists, and returns to cash when that momentum fades. Outcomes are not guaranteed.

Cisco daily %K holding the pop through the breakout

Daily %K climbs through the 70–80 continuation band as Cisco leaves its late-October range and then stays elevated instead of rolling over. The 28 October print of 74.9 is the value stated in the article; the other points were read from the daily stochastic pane on the published chart.
Daily %K climbs through the 70–80 continuation band as Cisco leaves its late-October range and then stays elevated instead of rolling over. The 28 October print of 74.9 is the value stated in the article; the other points were read from the daily stochastic pane on the published chart.CSCO · Daily · 1999-10-04T00:00:00.000Z to 1999-11-19T00:00:00.000Z

Except for the stated 28 October print, oscillator readings are visual estimates to the nearest 1–2 points. Session dates are inferred from the October/November axis labels and the 29 October breakout named in the text.

Educational research material, not investment advice. Historical source context does not establish present-day performance.
19 of 56 in the Average Directional Index track
20001-4 pp.Next on Average Directional IndexOnset and exit from one average directional indexThe mechanical trading system uses a 14-period average directional index as the sole reading for both the long entry and the exit.
All readings on this track · 56 readings
  1. 1986Cycle-aligned directional trend indicator
  2. 1987What crossover and directional entry rules actually compare
  3. 1988A directional-line cross needs a trend filter, an extreme-point rule, and a dollar stop
  4. 1988Constructing true range by offset addressing
  5. 1988Constructing directional movement from bar range
  6. 1988Average directional index construction: recursive smoothing and lookback offset
  7. 1988Staged Average Directional Index construction with Relative Strength Index confirmation and stop alerts
  8. 1988Average Directional Index construction with frozen true range and directional rules
  9. 1991Constructing the average directional index from range expansion and true range
  10. 1991Constructing five-session forecasts from stochastic, ADX, and MACD inputs
  11. 1993Constructing the average directional index from directional movement and true range
  12. 1993Confirming n-bar breakouts with ADX and DX filters
  13. 1994Constructing a Bollinger band-width trend filter
  14. 1994A pre-trade checklist that can refuse a long three ways
  15. 1997An ADX threshold and a moving average as a trend filter
  16. 1998Regime filters for mutated indicators
  17. 1999Building the average directional index from range extension and true range
  18. 2000Evaluating ADX, RSI, and moving averages in a multi-stock warehouse
  19. 2000Stochastic pop as a filtered continuation setup
  20. 2000Onset and exit from one average directional index
  21. 2002Joint ADX and MACD readout for trend strength and direction
  22. 2003Adaptive Donchian breakout with implied volatility and volume
  23. 2004The average directional index as a regime gate for the relative strength index and the stochastic oscillator
  24. 2004Constructing true-range-specified volume as a directional filter
  25. 2005Constructing a multi-filter penny stock breakout procedure
  26. 2005Construct one playbook that flips with session regime
  27. 2005Combining Bollinger Bands, the average directional index, and Fibonacci retracement on currency pairs
  28. 2006Assembling an adaptive price zone from double-smoothed averages
  29. 2006An ADX strength gate for MACD and the stochastic oscillator
  30. 2007Directional movement as a filter plus trigger
  31. 2007Constructing a veto-first trend permission stack
  32. 2007ADX gates for trend end, range, and reversal
  33. 2008Constructing a nine-cell directional-ratio grid
  34. 2008Average directional index and directional trend indicator lookbacks as trend-filter parameters
  35. 2008A holding-matched market lens from averages and directional-line crosses
  36. 2008A nine-cell directional scoreboard for multi-horizon entries
  37. 2010Building a Vortex Indicator from high-low distances
  38. 2010Constructing ADX, RSI, and MACD price filters
  39. 2011Constructing a volume zone oscillator with a moving-average and Average Directional Index regime filter
  40. 2011A volume zone oscillator conditioned by an Average Directional Index filter
  41. 2011Candlestick names need volume-price, ADX, and moving-average checks
  42. 2012Clustered average-directional-index traces as a trend-start filter
  43. 2012Average Directional Index cluster filters for trend-start signals
  44. 2012Confirming a trend start or turn with a triple ADX cluster
  45. 2013Constructing a late-entry stack from a signed DMI oscillator
  46. 2013A directional oscillator and its stochastic as a stacked timing filter
  47. 2013ADX cluster lookbacks are a locked specification, not a chart label
  48. 2013Combining moving averages, stochastics, and ADX in a daily scan
  49. 2015Assembling the Average Directional Index from directional movement
  50. 2016How an Average Directional Index filter and a breakout entry form one procedure
  51. 2016Score RSI and stochastic crossings only when ADX confirms the trend
  52. 2018Constructing an ADX filter for intraday breakouts
  53. 2018An ADX volatility gate for prior-day breakouts
  54. 2019Exponential deviation bands with a moving average, RSI and ADX
  55. 2020A normalized-slope trend filter from linear regression
  56. 2020Gating volatility-momentum divergences with a Trend filter
By fieldEntry and exit rules206 readingsBy year200059 readings
All 71 readings tagged Average Directional Index
Also on Average Directional Index5 readings
1991Constructing five-session forecasts from stochastic, ADX, and MACD inputs1994Building average directional index, the stochastic pair, and Williams percent R from highs, lows, and closes1994Label the tape before you read stochastic or Williams %R2004The average directional index as a regime gate for the relative strength index and the stochastic oscillator2005Construct one playbook that flips with session regime