DTosc

The DTosc is by far my preferred indicator, it’s a combo of RSI and Stochastic and the net result is I’ve seen referenced as “RSI on steroids”!

Most indicators have 1-3 inputs, the DTosc has 4, as with anything if it’s misused then it could dangerous to trade with, but if there’s a way of it working nicely then it can be worked with.  The danger lies in the usage and fiddling by the user, especially if they don’t know what they’re doing – you might think that you’ve found a substitute DTosc on a software platform, it’ll look very similar, but, it won’t be as smooth as the DTosc – If you opt for a sub-standard indicator you have to be happy if you don’t have quite as accurate trading results.

I’m only a secondary user of the DTosc, I would urge you to refer to Dynamic Traders Group for more information.  Robert Miner’s courses are (in my opinion) fantastic and very useable.  I know that some very high-profile traders that are currently considered “guru’s” have learnt his Fibonacci methods and mention them in their daily newsletters – I don’t trade using Elliott Waves, I’ve spent a long-time studying EW and for me it does not work , I know Miner focuses on EW counts, I just use the Time, Price and Momentum parts.

One of the reasons I use and like the DTosc is because It is a proprietary indicator – it’s unique to owners of the DT software – It’s not readily available to everybody.  This makes it unique and provides an extra edge over the masses – this uniqueness gives me trading signals which the masses just don’t see.  The DT Software is expensive and I haven’t bought the software solely for the DTosc, the DT software package has many, many unique functions that I like and use.

However, I have to add a cautionary word here, It’s an Indicator and all indicators lag price action – The DT method is great for catching tops, bottoms, support and resistance levels, but it does not compare to trading price action – i.e. THT Propulsion method

Dual Time-Frame Momentum trading Reviewed:

I can’t add anything more that what Robert Miner states in his book. I’ve a link to the book below, simply click the image.

I can swear by using multiple (3-4) time frames for trades – I’ve personally had success with 3 & 4 time frames i.e. Weekly / Daily / hourly & 15 min – I will at some stage update the DTosc page with a video showing use of Triple and Quadruple Time-Frame Momentum trading

This is not the holy grail, it does fail at times too!

Buy/Sell and Stop Zones Reviewed:

Whats a Buy/Sell and Stop zone?  Well very simply in a uptrend the buy zone is the <20 area on the DTosc and the Stop zone is the >80 zone on the DTosc and in a downtrend the >80 becomes the sell zone and the <20 zone the stop zone

Our rules are simple – in a Uptrend we are only looking to buy, in a Downtrend we are only looking to Sell and if there’s no trend you can either not trade or you can buy in the <20 zone and sell at the >80 zones to trade the range.

We could cover when the DTosc gets to the Stop Zone

We can employ 2 different strategies here, we can simply sell on the DTosc reversal and then start to trail a stop once the DTosc reaches the <20 Stop zone and just let the market take us out OR we can aim for 5-10% targets and once hit get out with a pre-determined order. – Theres no right or wrong, the choice is up to you.

70% in 6 months

Can you see how unwise it would have been to have gone long on any DTosc bullish reversals when the trend is down?  There are times when it would have been profitable such as the July reversal and the one immediately before – but the risk is far too great – that’s gambling at the end of the day!

Selling in a downtrend is a high probability calculated trade with the odds on my side.

To enter and exit trades I simply use Miner’s 1BH/1BL strategies – check out his book for details.

From Jan 2007 – Nov 2012, this strategy has had a 68.75% Win:Loss ratio on the S&P500 – I’m sure you’ll agree that this period was not normal, but it still worked and resulted in approx 8 trades per year

If a strategy has a 68% Win:Loss ratio then all I have to do is trade it 100 times a year risking 1% per trade to make 1%and I have 68% profit returns, if I risk 2% per trade I only have to find 50 trades for the year or stick with 100 trades and make 136% return on my account! Now to be fair as a professional I like to limit my losses as much as possible and the most I’d ever risk would be 1% of my entire account per trade, but the strategy that I do use is whatever the 1 x Risk is I set as my initial target, once price hits that level I sell 50% of my holding, move the stop to breakeven + 1 (to make the trade risk free from them on) and then I simply trail a stop along the 8 or 21 EMA until I’m stopped out – over the course of a year this has the effect of producing a risk:reward greater than 1:2 – this means that even if my system dropped down to a 50:50 win:loss basis for that year I’d still make money!!!!!

i.e. – the distance in points from my entry to my stop on a trade is 20 points, once I’m up 20 points, I sell 50% of my holding on that position and instantly raise the stop to BE +1 and then trail the rest @ the 8 or 21 EMA until stopped out – why the 8 or 21 EMA? This is when it becomes discretionary for you and there’s no perfect trailing stop system sometimes I’ll use the 8 EMA other times I’ll try and give the market as much room as poss and use the 21 EMA or even a 50 period moving average – remember the 2nd unit you’re trailing in the market is now playing with the markets money so its up to you as to how flexible you want to be – I’m a tight wad and like to win so you’ll find 80% of my trades are on the 8 EMA trailing stop because I prefer to lock in gains – has it ever happened that I’ve been stopped out on the trailing 8 EMA and the very next bar the markets rocketed even further without me?  Yes loads of times

This is how professional traders think – remember we have no idea at all what the market will actually due for certain.

Many of these trades can be seen in real-time on my Trade of the Week page

Single Indicator uses:

I never use to use DTosc with just one single line – I’ve found that the crossover system is safer for more accurate trades, however, now for my THT DTosc with Trend set-up (THT Propulsion but with DTosc!) I like to see the parameters for THT Propulsion set-up AND it’s nice when this is confirmed with the DTosc fast line (Blue) being <20 or >80, which adds weight to THT Propulsion – but I enter the trade based upon THT Propulsion rules, all the DTosc fast line indicator tells me is that a market is LIKELY to be getting oversold/overbought – it does not guarantee it.

I DO NOT use the DTosc for Divergences, you can use a Stochastic or RSI for that which is more clearer.

What can we use DTosc to confirm?

We can use the DTosc to indicate price cycles AND we can use it to tell use when a correction is complete – the DTosc is not 100% perfect, but it does give far fewer false signals and often when the DTosc reverses that usually coincides with a correction in price – If you use it in conjunction with price, fib levels and time analysis it can provide you with a comprehensive and very accurate trading routine that allows you to catch and trade tops, bottoms and reversals.

If you like the potential uses of the DTosc then as a starter you need a copy of Robert Miner’s book, click on the image to order:

               If after purchasing the book you can see the value of their approach to trading and investing then it would beneficial to own the software and trading courses – both of which I can 100% vouch for.

The only way to get hold of the original DTosc is via their software, click here to view

Click here to access the DT E-Learning course – 40 hours+ of superb tuition

Leave a comment

4 Comments

  1. Maharshi

     /  November 17, 2012

    intertesting article, what moving avarage values are you using

    Reply
  2. I’ve now altered the moving averages slightly and I’m testing during 2013 a 50, 130 & 260 simple moving average – I very much doubt it’s going to affect anything

    Reply
  3. Diaco

     /  July 17, 2013

    Hi Maharshi;
    do you know the procedure through which the DTOsc is constructed? I’d like to write a code for my own trading platform, but have a hard time finding a source that explains how Stoch and RSI are combined to result in the DTOsc.
    Cheers
    Diaco

    Reply

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