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  • #601
  • May 5, 2007 8:44am May 5, 2007 8:44am
Quoting waddij
Spud,

Thanks for the most recent download from your brain.....

One question. Is the idea then to have the 1H window with the 3 stoch in, once a convergence pattern forms dow e then switch to the 5M window looking for the best entry point and disregard the 15 and 30 or look at all three to be lined up before taking the entry?

Thanks
Hmmm....the fundamental basics are to use multiple time frame charts with stochs in them....this simply gives more precision but is harder to use and more difficult to visually see as opposed to one single chart.

Having said that, as before you want to look at multiple time frame charts in tandem and how they relate to each other...whether you use 2,3 or 4 the degree of accuracy is going to increase with more agreement with more time frames...that's just simple logic.

Using the 1H and 5M with 3-4 stochs is really giving you a wide range of time frame information on 2 charts.

Look at the 1H as scanning the horizon with your eyes and the 5 min as using a high powered telescope to focus on a small area. You'll see everything with your eyes but the details are fuzzy unless you can look closer.
  • #602
  • May 6, 2007 3:56am May 6, 2007 3:56am
Hi, As a new boy can I first of all add my thanks to Spudfyre for his hard work, openess and honesty regarding his trading strategy and all the other traders who have added their own valuble contributions. I have followed this thread for a month now and would now like to be an active trader of this system plus an active contributor. I do trade Forex full time, 5 days a week all year. I note in Posting 572 that Spudfyer offers a chance to walk through a Live Trade in a Chart Room. I would very much like to take up this offer if it being offered to a new boy like myself. I can assure you, the time would not be wasted and my input in the future I feel would be meaningful, I thank you in anticipation.
  • #603
  • May 6, 2007 5:51am May 6, 2007 5:51am
I found a very valuable indicator in Metatrader section of FF , it will display automatically in your platform the incoming news , downloading directly from ForexFactory calendar.
Here's original link discussion http://www.forexfactory.com/showthread.php?t=19293

http://img246.imageshack.us/img246/7318/chartta7.gif

Note : To let the indicator works properly, be sure to flag the option 'Allow DLL imports' (you can find it by pressing CTRL+O then select Tab Expert Advisor)

Thank to DerkWehler for this little gem
Attached File(s)
File Type: mq4 FFCal_v05.mq4   41 KB | 690 downloads
  • #604
  • May 6, 2007 6:15am May 6, 2007 6:15am
I'm a newbie and really appreciate the education Spud is giving us about how to use stochs. I would like to know more about the maths/science behind stochs and wonder if anyone can point me in the right direction of some goodreading material.
  • #605
  • May 6, 2007 6:27am May 6, 2007 6:27am
Quoting bundubill
I'm a newbie and really appreciate the education Spud is giving us about how to use stochs. I would like to know more about the maths/science behind stochs and wonder if anyone can point me in the right direction of some goodreading material.
Not being rude but seriously just google the word stochastics, you will get plenty of hits.
  • #606
  • May 6, 2007 7:28am May 6, 2007 7:28am
Quoting bundubill
I'm a newbie and really appreciate the education Spud is giving us about how to use stochs. I would like to know more about the maths/science behind stochs and wonder if anyone can point me in the right direction of some goodreading material.
1. google stochastic
2. google stochastic each time with a different word - forex, stock, trend, range, formula, George Lane
3. remember that stochastic in general is an area of probability that is used by nearly everybody - the Stochastic Oscillator is a small planet in the overall stochastic universe
4. read everything you can find about stocs here at FF - Spud's is the best.
  • #607
  • Edited 7:34am May 6, 2007 7:33am | Edited 7:34am
Quoting WillBill
Hi, As a new boy can I first of all add my thanks to Spudfyre for his hard work, openess and honesty regarding his trading strategy and all the other traders who have added their own valuble contributions. I have followed this thread for a month now and would now like to be an active trader of this system plus an active contributor. I do trade Forex full time, 5 days a week all year. I note in Posting 572 that Spudfyer offers a chance to walk through a Live Trade in a Chart Room. I would very much like to take up this offer if it being offered to a new boy like myself. I can assure you, the time would not be wasted and my input in the future I feel would be meaningful, I thank you in anticipation.


I, too, would like to thank Spudfyre and all other who have invested in my forex education. I promise to return the favor to others once I have the ability to mentor. What a thrill it must be to help turn on the light for someone in a field that can change a family's future.

I have 2 questions...
Where would I join the live chat mentioned on this thread?
How do I open attachments? I often see a link below a post, but my computer does not recognize the type of file.
  • #608
  • May 6, 2007 7:49am May 6, 2007 7:49am
To all Spud's follower, I'm in touch with Fastbrokers to setup a new better chat room for all who wants to trade in live with Spud.
I will post here more detail when chat will be ready (hope next week)

Stay tuned
  • #609
  • May 6, 2007 8:24am May 6, 2007 8:24am
I have been occupying most of my weekend studying the 5,3,3/14,3,3 phenomenon with stochastics and price moves. As I stated here before this combination of stochastics gives you a great elasticity indicator and a measure of the strength of the price move versus the strength of the stochastic move.

However, while analyzing this I realized that although you can keep complicating the formula...the more complicated it gets the more interpretive it becomes. Such as adding the 15,5,5 and looking for elasticity/convergence. Dang if it doesn't work extremely well but it will give you a headache trading it.....so I decided to look harder to simplify it.

I spent a lot of time identifying the periods of sync between stoch moves and multiple time frames for scalping and how best to identify scalp moves when lo and behold I didn't discover something more interesting.

While looking at the charts a distinct pattern was developing to identify tops and bottoms on the price chart. The bonus of this pattern is it is much clearer as the time frame increases...it is almost "perfect" on the day chart. What is a little more strange, is that it was difficult to find any exact sync with multiple time frames but that each time frame would give you separate entries within the "boundaries" of the longer time frame moves....perhaps a little more along TEB's (Ginger's) ideas.

Below is a picture taken from a day chart. There are a few rules to identify the pattern:

1. In a short move (price has topped) the 5,3,3 stoch moves under the 14,3,3 stoch or they merge at a very high level. On the price chart you are probably seeing a new high.

2. In the long move (price has bottomed) the 5,3,3 stoch moves above the 14,3,3 stoch or they merge at a very high level. On the price chart you are probably seeing a new low.

Now trading this signal gets becomes a little intuitive. You want to interpret if you are seeing a new high or low rather quickly to maximize pips, but you also don't want to get faked out and jump in too early.
The good news is that fakes, especially on the daily chart are not that common. Even in a fake you stand to know you are being faked out and can still gain pips with a careful exit.

The picture below shows a sell fake. This is where elasticity can play a huge role. Notice how much the 5,3,3 and 14,3,3 separate. This is a good sign to try and get out of the trade before the 5,3,3 snaps back to the 14,3,3. When you see that sign, you can save yourself!

You can limit risk by determining at what level the stoch makes the signal.
Both stochs:
above 90 - safest entry
above 80 - good entry, still quite safe
above 70 - good trades here but also lots of fake moves
below 70 - not recommended

Best suggestion is to grab a day chart and overlay the 5,3,3 and 14,3,3 "K" stoch lines together and then draw vertical lines at new highs and new lows.....you'll soon see what I am describing here quite clearly. Now look for the fake outs and see the elasticity (seperation) of the 5,3,3/14,3,3.
Attached Image
  • #610
  • May 6, 2007 8:47am May 6, 2007 8:47am
Hi Spud

What Time frames are you looking @ trading with?
1 hour & 5 mins?
or Day & ?

TEB
  • #611
  • May 6, 2007 8:53am May 6, 2007 8:53am
Trading the 5,3,3/14,3,3 on multiple time frames is a little different than previous discussions about stochs.

The problem is, if we look at a single long entry and exit area (low to high), you may have several dozen 5M cycles from low to high in the same day period...less 15 min cycles...less 30 min cycles and so on. It would be best to ignore any high to low cycles as we are long in the day.

What you have to determine first is what time frame you are going to use to trade.

Scalp on 5 min longs?
Or pip longs on 15/30/1H or even 4H?
Or maybe just trade the day long?

If you really want action, you could trade them all...but here you are not escalating...you are simply trading each unique time frame as a separate trade based on seeing the indication I explained earlier.

What you do use the multiple time frames for is to find the "zone". For example let's walk through a long trade on a 30 min chart.

1. The first thing we want to know is what the daily is doing and how long ago it made a long indication and how close it is to a new high. It is better that the day is early in its long trade, near the low it has risen from and far away from a new high.

2. You have to expect that the 30 min time frame is going to give you at least a few trades long as the daily climbs. Now you can just use the 30 min and day chart as you are actually using 4 stochastic time frames with 5,3,3/14,3,3 on each chart.

3. You may want to use the 5 min chart to optimize trade entries on the 30 min chart. This would in fact give you 6 stoch time frames using 5,3,3/14,3,3 on each. So in a long...you don't want to be entering a trade with the 5 min falling...you want to wait until it is rising. This can be done anywhere along the 5 min rise. I would prefer entering at a low point on the 5 min...just as you determine in the day and 30 minute.....but entering with the 5 min headed down from 80 is a bad idea. Once you enter the trade you ignore the 5 min...I recommend not looking at it.

4. Exiting the trade is going to be subjective. The safest exit is going to be when the 30 min 5,3,3 tops out around 80-90. The other way is more mathematical. Simply look at all the previous longs on the 30 min 5,3,3 stochs and measure their pip gains to get an average pip gain per long stoch run up. You'll find that the variance is usually quite small when the "trend" is up during the long stoch moves. SO say you find the ip gains for the last 10, 30 min up stoch moves on the 5,3,3 from 20-80 were 20,25,28,33,27,19,35,40,28,30...then you might use the lowest (19) as you TP or the average (28) as a TP...or maybe split the difference and use 23. If you see a wonky pip gain..say in this example you get a 10 pip gain...I'd just throw that number out and not use it.

There's a lot here to digest so if you are confused ask questions on what you don't understand and I'll dive deeper into those areas. Please keep in mind this is somewhat different than the older MTF Stoch methods I have explained.
  • #612
  • May 6, 2007 9:03am May 6, 2007 9:03am
Quoting TEB63
Hi Spud

What Time frames are you looking @ trading with?
1 hour & 5 mins?
or Day & ?

TEB
All are possible. The Day is very clear to signals, so I'd use it as my main reference point for trading long or short on any lower time frame (you'll probably like that part!) Trading the day is for the more experienced I think because it is hard to get other time frames to support the trade.

Any other time frames traded should be used in conjunction with the day. I'd probably do the following if it were me:

Day/4H/15
Day/1H/15 or 5
Day/30M/5M

I think you'd be wasting too much opportunity trading the 15 or 5 for scalps...unless you just want something to do. I looked at this:

Day/30/5M trading the 5 min scalps with Day/30 in same direction as looking to be very accurate....not always going to get 5 pips, but sure to grab a few. The biggest problem is 5M will diverge much more than other time frames.

Obviously the higher time frame trades the more pips is there for TP. This is one time I'd advocate grabbing more pips and using the exit strategy I suggested with average pip gains from previous moves.
  • #613
  • May 6, 2007 9:11am May 6, 2007 9:11am
I did some work comparing 30 & 60 mins
I found the 60 is just so much clearer cleaner.
that is, if it is your cover or trend chart.

I have also found if you use the same TF over & over again
you get to really know them ...
that is why I liked day 4 hour & 30mins for years

That is all I can say at this time
sorry I have no charts to show
-not at home

TEB
  • #614
  • May 6, 2007 9:14am May 6, 2007 9:14am
One question that may arise is "What about the other Stochastic methods"?

I'm so giddy about this 5,3,3/14,3,3 indication and how it shows so much so clearly ...I'm a lot biased to using it for now. The down side is I haven't used it much in live trading except to scalp and I made a bundle scalping the last few days.

I still look for the "holy grail" of MTF Stochastic trades I can trade and leave....I'm sure many of us look for that. So far this is about as close as I have come to finding something that makes total logical sense and seems to identify moves so clearly that I am gaining confidence more and more that this could be long term traded without risk of large draw downs.

I'm just diving into this so long term accuracy using this is still unknown. However, we have some great minds here in FF and hopefully we can identify the good and bad and keep on developing it.

So...if you want to be safe trading live, I'd suggest trading to the "classic" MTF stochastic methods before diving into this 5,3,3/14,3,3 stuff.

If you'd like to help develop this...I think using a lot of demo trading now may be a good idea. I am going to trade it live simply because I concentrate more and get a better idea of how I do. I am hoping what I write here will open up a of discuyssion because it looks very promising.
  • #615
  • May 6, 2007 9:18am May 6, 2007 9:18am
Quoting TEB63
I did some work comparing 30 & 60 mins
I found the 60 is just so much clearer cleaner.
that is, if it is your cover or trend chart.

I have also found if you use the same TF over & over again
you get to really know them ...
that is why I liked day 4 hour & 30mins for years

That is all I can say at this time
sorry I have no charts to show
-not at home

TEB
Yes it seems the longer time frames give a clearer picture.

I'm wondering if the smaller time frames may show us somethig during live trades as opposed to seeing them static? Not sure if you have tested this on live charts with short TF's? The elasticity thing works wonderful for scalping but you can see the development so much easier as the 5,3,3 and 14,3,3 actually move as opposed to back testing from the few days I have played with it.
  • #616
  • May 6, 2007 10:13am May 6, 2007 10:13am
Quoting Spudfyre
Yes it seems the longer time frames give a clearer picture.

I'm wondering if the smaller time frames may show us somethig during live trades as opposed to seeing them static? Not sure if you have tested this on live charts with short TF's? The elasticity thing works wonderful for scalping but you can see the development so much easier as the 5,3,3 and 14,3,3 actually move as opposed to back testing from the few days I have played with it.
YEP--
I find esp when they both break the 50% on the stoch at the same time!!
at least on the 5 min chart

TEB
  • #617
  • May 6, 2007 12:20pm May 6, 2007 12:20pm
Teb & Spud (Fred & Ginger) ,

I feel the 5,3,3 and 14,3,3 on the 1 hr is great for indicating the short term trend for scalping. If you look on the charts, when the 5,3,3 and 14,3,3 agree even for an instant, the move is good for 20 pips or so. I didnt research this, but throwing it out there... If the day and 1 hr agrees we can zoom into say the 15 or 5 mins to take a signal in that direction.

I guess what I am saying is the 1 hr seems to be key using the 5,3,3 with the 14,3,3... atleast for me.

Spud, You said you made a ton of pips scalping the 5,3,3 and 14,3,3... How did you go about it?

Thanks,

Bagovino
"Skills pay the bill's!"
  • #618
  • May 6, 2007 12:43pm May 6, 2007 12:43pm
Quoting bagovino
Teb & Spud (Fred & Ginger) ,

I feel the 5,3,3 and 14,3,3 on the 1 hr is great for indicating the short term trend for scalping. If you look on the charts, when the 5,3,3 and 14,3,3 agree even for an instant, the move is good for 20 pips or so. I didnt research this, but throwing it out there... If the day and 1 hr agrees we can zoom into say the 15 or 5 mins to take a signal in that direction.

I guess what I am saying is the 1 hr seems to be key using the 5,3,3 with the 14,3,3... atleast for me.

Spud, You said you made a ton of pips scalping the 5,3,3 and 14,3,3... How did you go about it?

Thanks,

Bagovino
I scalped on 5M for 5 pips when the 15/30 were in the same direction and tried to go with the trend. However, I improved that by a leap when I threw in the 14,3,3 stoch with the 5,3,3 and looked for both moving together. That got even better when I saw the elasticity indication and figured out it's use.

However, I would agree with you and TEB's as I keep studying this that 1 Hr is a good indicator with 5,3,3/14,33. I think with the 1H and Day signals together you can pretty much grab pips to your hearts content from 5,15,30,1H depending on how you like to grab pips.

I certainly like the long term opportunities this develops.
  • #619
  • May 6, 2007 1:20pm May 6, 2007 1:20pm
Below is a picture of the 1H GBPUSD chart. The thick red vertical line on the left side is where the Day chart gave an indication to sell using the 5,3,3/14,3,3 stochs. In reality by using the 2 stochs on the day chart is the equivalent of having 2 time frames agreeing.

The vertical red dashed lines represent sell signals in the 1H chart. Notice the accuracy. Again this is with the 5,3,3/14,3,3 stoch signaling the sell. Remember the day chart signaled the sell first with 2 stochs and now we used 2 stochs on the 1 Hr ro signal sells...that's 4 stochs and 4 time frames giving us signal.

As an option, if this isn't accurate enough for you ( )....you can add a 15 or 5 min chart to the mix and try to tweak entries to gain a few more pips. This would certainly give you some room to enter later as opposed to too early. Late entry is much better than early entry as I see it. You can see the too early problem clearly on the first sell indication after the day line. No big deal, it simply means a draw down but it could have been refined using the 5 or 15 min charts.

In all these examples I waited for both stochs to go above 80. If you look real hard on the chart you will see a possible sell where the 5,3,3 just touches below 80....again this sell would have worked if you jumped in too early but would have had draw down to contend with.

On the fourth sell signal you can clearly see the elasticity in the stock where the price remains fairly flat from it. This would have been a near break even trade....if you entered too late...or not such a bad trade by using the 5M or 15M time frame to get the best entry. However, the elasticity is giving you fair warning that you need to bail out of this trade before the price jumped up.
Attached Image
  • #620
  • May 6, 2007 5:34pm May 6, 2007 5:34pm
Hey Stoch lovers. I have been following this and tebs methods with interest. I got to doodeling with different variations of stochs, digital, combined, weighted,etc. I like non lag stochs with some mods but I havent come to conclusions yet. But I did create a weighted stochs. I would like you stocchies to have a look at it and see if I am headed in a right direction. It doesnt look a whole lot different than a normal stochs but it does have some smoothing tendencies.

Basically it takes the lesser two timeframes, in a 15M chart it takes 15,5,1M stochs and assigns them a weight based on timeframe and plots them. The weight is derived like so..
1m=0.048%;
5m=0.238%;
15m=0.714%;
1+5+15=21, 15 is 71.4% of that and so on through the timeframes.
1h,30m,15, and the likes.
So the largest timeframe gets the most weight in the calculation and the smaller the least.

All the settings are self explanatory except charttime, set this to your current charttime. I have only done 5,15,30,1h until I get some feedback. I couldnt think of a better way to weight them except how it is unless it would be a 50-35-15 or something.

Anyhow, let me know if I should proceed or dump it. Thanks guys.
Attached File(s)
File Type: mq4 WeightedStochs.mq4   7 KB | 746 downloads
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