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MTF Stochastics

  • #901
  • Jun 23, 2007 8:46pm Jun 23, 2007 8:46pm
Good News!

Spud said he will be at MTF Traders room on Mondays 6pm-7pm EST for a live session. Please do your homework - study spud's thread and bring your questions

If you need help getting to the room, please read instruction to the room here http://forexfactory.com/showthread.p...ht=mtf+traders
  • #902
  • Jun 23, 2007 11:57pm Jun 23, 2007 11:57pm
PIPR PRO
How did you get all Lines in one chart like in #800. I finally have it like #799. If I do like senbanda said it just keeps giving me more individual windows.
Thanks
COG
  • #903
  • Jun 25, 2007 7:52am Jun 25, 2007 7:52am
Below is a chart of GBPJPY. The 4H is falling so we'd prefer a short trade. There is a high risk long trade available where we'd like to see the 30M climb up and then turn and fall....this would be the better short entry if it happens and would probably net 10-20 pips. If the 30M climbs and falls then we could ride the 1H into the oversold and perhaps the 4H down to 23.6. Have to keep an eye on 30M moves. Can also view 15M (not here for clarity).
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  • #904
  • Jun 25, 2007 8:10am Jun 25, 2007 8:10am
Now we are definetly better off waiting for a short postion and best entry will be if 30M rises to overbought and then turns to cross 76.4 line to fall...if 1H follows so much the better, but need to watch that 4H is still falling.
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  • #905
  • Jun 25, 2007 2:07pm Jun 25, 2007 2:07pm
Now that the 30M has turned down and crossed 76.4, the 1H has turned and the 4H still appears to be falling it looks like a good short position. This is targeted for 20 pips net but we will watch for some critical signs such as:
1. What happens to the 1H and 30M after they close (if they close) below 50%.
2. If the 30M falls to 23.6% where is the 1H in relation to it
3. Look to hang on for a 30M oversold position, 1H and perhaps ride the 4H to 23.6%. Watch the 4H if it crosses 50% and see if there might be a reversal set up after that.
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  • #906
  • Jun 25, 2007 3:03pm Jun 25, 2007 3:03pm
Hi Spud,

You mentioned that you omitted the 15 min stoch for clarity purposes... are you putting less weight on the 15min stoch? I wonder because the 15 min sometimes takes off by itself and price does not follow with the same volatility.

Thanks
Unus pro omnibus, omnes pro uno
  • #907
  • Jun 25, 2007 3:07pm Jun 25, 2007 3:07pm
Decided to jump out with 17 pips net with the close of day looming I don't want to get stuck with any interest. 30M is rock bottom. I added the 15M stoch to better time my exit. Probably a few more downward pips here, but no matter I made my 17 and that's all I need for this trade.
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  • #908
  • Jun 25, 2007 3:11pm Jun 25, 2007 3:11pm
Quoting moneda
Hi Spud,

You mentioned that you omitted the 15 min stoch for clarity purposes... are you putting less weight on the 15min stoch? I wonder because the 15 min sometimes takes off by itself and price does not follow with the same volatility.

Thanks
I typically use the 15M/5M to time entries and exits....no point in exiting if the 5/15 are both at the top and headed down in a short position. I don't rely to heavily on the 15M moves other than pay close attention to price when the 15M goes against me. Otherwise I'd rather use the 30M as it isn't as cyclical and the 30M/1H I find make a pretty reliable tandem.
  • #909
  • Jun 25, 2007 3:30pm Jun 25, 2007 3:30pm
Spud,

Thanks for that explanation. In the chart below at present would you agree that the 30 and the 60 seem to be heading north thus a sign that we should be exiting this short entry?
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Unus pro omnibus, omnes pro uno
  • #910
  • Jun 25, 2007 4:01pm Jun 25, 2007 4:01pm
Quoting moneda
Spud,

Thanks for that explanation. In the chart below at present would you agree that the 30 and the 60 seem to be heading north thus a sign that we should be exiting this short entry?

We can expect to watch the 15M cycle upwards probably to 76.4 or more. Having said that it would be a question of if the 30M will follow. I'd rather play safe and still chase the shorts on this one until the 4H and 1H stop falling.

The answer to your question is that if you are + pips I would exit, if you are -'ve pips I'd ride it out and see how fast the 15M cycles and how far up it goes. I'd still be in the 4H groove that the 4H will fall to 23.6.
  • #911
  • Jun 25, 2007 4:05pm Jun 25, 2007 4:05pm
Spud,

Thanks.... I am glad to see that we are on the same page! Your experience and willingness to share it is priceless.
Unus pro omnibus, omnes pro uno
  • #912
  • Jun 25, 2007 4:34pm Jun 25, 2007 4:34pm
The GBPJPY is in a bad position for any trade entry. If we were stuck in a -'ve short position then I'd ride it out depending how -'ve that position is. The problem with this set up is that although the 1H and 4H are falling, the 15/30 are likely to climb and we can expect the worst that they will climb to 76.4 before any continued fall....that's the stochastic position.

The speculation is that the 4H will fall to 23.6 and that we if we are stuck in a short trade we can ride out the short term move of the 15/30M/1H if they climb.

It would be fairly safe to assume (statistically) that the 4H will cross the 50 and that if price does reverse and the 4H crosses back up across the 50 we should jump in that long to recover any losses from a bad short caught in a reversal. However, we'd expect that our short entry will be in a + pips position if the 4H comes down across 50 and then we'd be looking at the stochastic positions again.
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  • #913
  • Jun 25, 2007 5:51pm Jun 25, 2007 5:51pm
Quoting Spudfyre
The GBPJPY is in a bad position for any trade entry. If we were stuck in a -'ve short position then I'd ride it out depending how -'ve that position is. The problem with this set up is that although the 1H and 4H are falling, the 15/30 are likely to climb and we can expect the worst that they will climb to 76.4 before any continued fall....that's the stochastic position.

The speculation is that the 4H will fall to 23.6 and that we if we are stuck in a short trade we can ride out the short term move of the 15/30M/1H if they climb.

It would be fairly safe to assume (statistically) that the 4H will cross the 50 and that if price does reverse and the 4H crosses back up across the 50 we should jump in that long to recover any losses from a bad short caught in a reversal. However, we'd expect that our short entry will be in a + pips position if the 4H comes down across 50 and then we'd be looking at the stochastic positions again.
Its going Down!!! big!!
Look at a macd or RSI or TL
You see the "big D" everywhere ( it is summer!!)

But you see it on the Stochs very easy
Week, Day, 4 hour , 1 hour

TEB
  • #914
  • Jun 25, 2007 6:47pm Jun 25, 2007 6:47pm
Quoting TEB63
Its going Down!!! big!!
Look at a macd or RSI or TL
You see the "big D" everywhere ( it is summer!!)

But you see it on the Stochs very easy
Week, Day, 4 hour , 1 hour

TEB
wow MR TEB I see it different from you
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  • #915
  • Jun 25, 2007 7:50pm Jun 25, 2007 7:50pm
Quoting TEB63
Its going Down!!! big!!
Look at a macd or RSI or TL
You see the "big D" everywhere ( it is summer!!)

But you see it on the Stochs very easy
Week, Day, 4 hour , 1 hour

TEB
Like I said...we can speculate that the 4H will go to 23.6 or lower but that we have to watch the other indicators to make sure we don't run into a reversal along the way. However, nothing wrong with grabbing a few pips on the reversals along the way if the 4H keeps falling.

It is prudent to watch the stochs for any upward movement here as the 15/30 could decide to cycle up again out of the over sold zone. The 4H may want to retrace long after crossing the 50....not likely but we have to keep an eye out for an upward move. Probability is on the down side.

If we are not in a trade best to wait for the 15/30 to cycle so that we can get into a good short position. Watch for the 15M and/or 30M to rise above 23.6 and or 50 and turn back down...that the sign for short entry.
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  • #916
  • Jun 26, 2007 4:58am Jun 26, 2007 4:58am
Quoting sshhmmuueell
wow MR TEB I see it different from you

What are your MA an this chart ?

TEB
  • #917
  • Jun 26, 2007 5:13am Jun 26, 2007 5:13am
I will take my pips & run!!
TEB
  • #918
  • Jun 26, 2007 7:15am Jun 26, 2007 7:15am
I had a question yesterday on the chat site with regards to identifying trends and ranging periods with stochastics. Both are very easy to identify with MTF stochastics.

Trends
The chart below is the current GBPJPY. Notice that the 15M/30M and 1H stochastics are very busy below the 4H stochastic line while the price takes a downward trend.
The other identifier which is easier to use is that when the 4H stochastic crosses the 76.4% line and is falling we have a very high (around 75%) probability that it will end up lower than the 50% level and more than likely will fall below 23.6%. Unfortunately, as we can see in this example the price rarely moves in a nice straight downward trend and there are many up cycles within the downward moves. This is actually to our benefit as we will get a few opportunities to trade within the downward trend in a most reliable fashion.
Also during a downward trend like this, we can draw a trend line on the stochastic from the each high peak and see that each successive high peak is lower than the previous one. This is more relevant with the 1H time frame but the 30M is a useful guage as well. We usually do not get enough peaks and valleys in the 4H stochastic to follow a trend in this manner.

I'll diagram ranging in the next post.
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  • #919
  • Jun 26, 2007 7:34am Jun 26, 2007 7:34am
In a ranging situation the stochastics usually get "stuck" between the 23.6% and 76.4% levels with very few stochastics crossing either of these levels.

The chart below shows and example of a ranging market. Notice the 4H is stuck in the over bought area above 76.4%. It is unlikely in a ranging market we will see the 4H transition from 76.4% to 23.6% or vice versa, typically the 4H is "stuck" in an over sold or over bought position. Generaly we will see the 4H stochastic go flat in any ranging market.
More important are the 15M,30M and 1H time frames. Although the 1H stochastic is taking a downward trend, none of the other stochastics are following this trend and price is hardly moving. The 15M and 30M to a lesser extent are cycling between 23.6% and 76.4% but we can see the 15M stochastic (the thin red line) is cycling very evenly around the 50% level.
Notice that the stochastics give a very clear indication of the range period ending towards the end of the range when the 15M, 30M and 1H stochastics all fall below 50%.
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  • #920
  • Jun 26, 2007 7:41am Jun 26, 2007 7:41am
Spud,

In a ranging market such as the one you posted above, do you move to the 5 min and do some scalping? or do you wait for the 15/30 to move towards the 4hr and try to go for 20(+/-) pips?

thanks
Unus pro omnibus, omnes pro uno
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