How to use the Quick Stick indicator

The Quick stick or Qstick Indicator was designed by scientist, inventor, author, and trader Tushar Chande as a method to quantify candlestick charts.

Chande has a Ph.D. in engineering and holds nine U.S. patents.

Chande and Stanley Kroll co-authored the widely acclaimed book The New Technical Trader, he also wrote Beyond Technical Analysis.

He is a regular contributer to Stocks and Commodities magazine and has also published numerous papers in engineering journals and is widely recognized for his expertise in designing innovative trading systems.

So from that introduction you can see he is a pretty smart guy. In my opinion the Qstick indicator is his finest piece of work.

Interpretation

The distance between the open and close prices lies at the heart of candlestick charting. For those unfamiliar with candlestick charting, the body of a candlestick is black if today's close is less than the open; it is white if today's close is greater than the open. A majority of white candlesticks over a specified range is considered bullish. Whereas a majority of black candlesticks over a specified range is considered bearish.

• Quick stick values below zero indicate a majority of black candlesticks (over the time periods specified) and therefore a bearish bias for the security.

• Qstick values above zero indicate a majority of white candlesticks (over the time periods specified) and therefore a bullish bias for the security.

• The Quickstick indicator can identify overbought and oversold conditions.
   

There are several ways to trade the Quick stick indicator:

• Crossovers. Buy when the indicator crosses above zero. Sell when it crosses below zero.

• Extreme Levels. Buy when the Qstick indicator is at an extremely low level and turning up.

• Sell when the Qstick indicator is at an extremely high level and turning down.

• You may even want to plot a short-term moving average on the Qstick to serve as a trigger line.

• Divergences. Buy when the Qstick is moving up and prices are moving down.

• Sell when the Qstick is moving down and prices are moving up.

• You may want to consider waiting for the price to confirm the new direction before placing the trade.

    Qstick > 0 Signifies an up trend, Qstick < 0 Signifies a down trend.

 Signals the end of the uptrend in good time...... 

       Divergences in Qstick are worth observing, the diagram shows why

       Quickstick flags up early warnings when trends are ending ( Red arrow  when zero is crossed )

                  When lengths are shortened, Qstick functions well as an oscillator, giving good entries on extreme levels..

• The Qstick function can be used in system signals

• Can be used to validate trends

• Measures extreme overbought and oversold levels (as an oscillator

• Can be used as a divergence indicator

• Works in any time frame ( Weekly, Daily, Hourly, Minute etc )

• Real-time or delayed prices

• Does not require volume