MTF Stochastics Trade Journal

I'm starting this thread so that I can keep a track of my trading results without cluttering up Spudfyre's fantastic thread. For those of you who haven't looked at his system for trading using multiple time frame stochastics, I highly reccomend that you go to his thread and read every single post:

http://www.forexfactory.com/showthread.php?t=22105

For my first trade, here is the setup, entry, and exit I took on the GBP/JPY. I was hoping that this trade was going to produce more, but 20 pips is A-OK by me.

Weird -- my charts are gifs, so you should be able to see them without clicking on the links, but when I upload them the gif gets changed to jpgs!? Why does the forum do that? Oh well...Sorry you have to click on the links.

Hi Tommy,

Thanks for starting this journal. I'll be following closely.

I've always loaded jpg files directly, never had a problem. Weird. It's possible that the server might not allow you to post three images at once. You might try either combining them into one, or posting them separately. Just a thought.

Good luck!

Thanks, Jeff.

And to answer a question you asked me on Spud's thread, I live in Texas. That doesn't tell the whole story, though, as I travel 100% for business. Consequently, I am currently in a hotel on the west coast but next month I could be on the east coast and, within the year, my job will probably take me all over the world.

Needless to say, I'm going to spend a LOT of time being jetlagged!

Well, that explains your late night trade excursion -- you had three hours on me!

Looks like you've got a nice little pileup here, all waiting for your next move.

Nothing looks really good to me this morning and, after a string of really bad trades last week, I'll be playing my conservative card for awhile.

Have a safe journey...

Hi Tommy,

I like your combination of methods here, using candlesticks in combination with the multiple timeframe stochastics.

I would think that you would have a very high success rate if you get the process right.

I have often tried to follow and understand candlestick/bar patterns, and it is probably down to my inconsistancy, but I have never quite managed to make them work. I always find them very easy to see after the event, pin bars at reversals for example, but always seemed to pick the failures. Possibly combining them with the stochs may be part of the answer.

We all know that Steve Nison is the guru of candlestick charting, but have you ever read the book on candlesticks by Martin Pring? It was one of the very first trading books I bought, and have just been looking at on my shelf wondering if I should give it another look.

Keep up the great trades. I would wonder if you thought about taking a recent short on GBPUSD. 4 hour stoch flatlined or crossing down, but still above 76.4, hourlies down below 76.4 and engulfing candle, same on the 30 min, and 15 min. Waiting for the close on the 15 min would leave and entry at about 20378.

How would you have seen this set up?

Rgds,

G-Man

G-Man,

Believe me, I understand exactly how you feel. I generally feel that I am of above average intelligence, but I have gotten my head handed to me so many times over the past year by the forex market. It can be quite discouraging. But don't give up. And don't crucify yourself for your losses. Keep your lot sizes low, so you can preserve your trading capital while you learn. Learn from my mistakes! I have nearly blown out a $5000 account. Don't let that happen to you. Now, after a lot of pain and frustration, I think the pieces are finally starting to fall together.

Yes, I do believe that the candlesticks with the MTF stochastics is a very good combination. I have only been trading this method for a few day, though. In that time, I have been 100% over seven trades. I have NEVER had that kind of consistency before, so I am getting a little excited by it.

As far as trading candlestick patterns go, Nison points out that sometimes candle patterns don't work out. And you don't know they won't work out...until they don't work! That's where I think the MTF stochastics comes in. I think the candlestick patterns give the early warning and the MTF stochastics confirm the change in direction.

I have never read Pring's book on candlesticks. When I was searching for a good book on candlestick charts, I kept on coming back to the fact that Nison is the originator. Everyone else has interpreted his work, but he is the one that is closest to, and most familiar with, the original japanese source material. So that's what I decided I'd stick with. I'm sure there is good material in Pring's and Bigalow's books, but I don't want to bog myself down with too much material.

After over a year of chasing my tail, losing money, and trying every indicator known to man, I have come back to simplicity: candle patterns, horizontal S/R lines, and ONE indicator coordinated across multiple time frames. That should be all anyone should ever really need.

I don't have access to my charts, right now, but I'll review the GBP/USD later this afternoon and let you know how I would have viewed it.

Thanks for stopping by and reading my journal.

G-Man,

I looked at my charts for the GBP/USD. I don't know if I am looking at the times you are referring to, but I posted a chart of what I saw. On the M15, M30, and H1 there were BIG bearish engulfing patterns that all came at the same time. They were all over 76.4, too. According to Spudfyre's method, we would wait until the H1 closed below 76.4 to enter, but I would have entered sooner. the M15 closed below 76.4 @ 11:45 GMT (at the close of the 11:30) candle. But I would have entered 15 minutes sooner at the close of the 11:15 candle due to the enormous bearish engulfing pattern after such a steep run up (perfect bearish engulfing setup), coupled with the fact that the M15 stoch crossed its signal line with an incredibly steep angle down, the M30 stoch had already crossed and was now pointing almost straight down.

True it means more risk, but with the entry @ 11:30, instead of 11:45, I would already be out with 20 pips. The 11:45 entry would have gotten down to +16, and would be sitting at about +5 right now. It will still, probably, hit +20 at least due to the fact that the H4 stoch is about to cross down below 76.4. We should all be watching the GBP/USD to start a huge drop with tonight's London session. Most trends on the GBP/USD start on a Tuesday.

Anyway, that's my $.02 worth.

Thanks for your reply Tommy.

I have pulled out my book again which includes a CD and having a quick re-read it definately refreshes the memories! I think one issue I was having was not being stict enough in the interpretations of the candles, with the worst offence looking for reversal patterns, which is basically what the majority of candlestick patterns identify, when there was no real trend in the first place to reverse.

You description of the cable trade I mentioned yesterday was exactly what I saw. I will endeavour to post some charts to accompany my posts in the future. I only wish I saw that form in real time as I would have traded it.

Seems like another quietish day today except for the pound related pairs. Hope your day has been good.

G-Man

I haven't posted my trades for the last day, or so, because I haven't really been following Spudfyire's method. I have been making entry too early and at points when all the stochs aren't exactly in line. Even though they have worked out, I haven't wanted to post them, because they were primarily made on intuition, and not really any kind of decent trading strategy.

Here is a trade I put on, last night, at the London open. As you can see, in the hour before the London open, price made a little run up. What usually happens is that there is a reversal at the London open. It happens so regularly, that I have traded it with great success many times before. Consequently, as we were heading into the London open and I saw both the M15 & M30 stochs @ 80 and starting to turn down, and the M30 over 50 and converging, I entered short in anticipation of the turn down in price.

In my mind, as price had been stalled out on the H4 after the steep run up on Tuesday, the early entry short was a pretty safe bet, so I didn't feel the need to wait for the confirmation of either the H1 or H4. So this still wasn't a "textbook" entry by Spudfyre's rules.

I didn't know how far price would go down, but since I wanted to get sleep rather than stay awake and watch the market, I set a modest take profit at 20 pips and went to bed.

It was rather nice to wake up to a successful trade having been completed! I also had a really ugly trade on the GBP/JPY that also hit a 20 pip take profit while I was sleeping. I'm not quite sure I want to post the chart for that trade, though, because it was not the greatest setup in the world, and I was just fairly lucky that it worked out.

I am also looking at taking a trade long on the GBP/USD this morning. Whenever there is a good steep run down in price during the London session, very often there is a retracement at the NY open. Right now, the M15, M30, & H1 stochs are all below 20 and turning up. Even though H4 is almost straight down, I think that the 50% retracement level would be a pretty safe bet. We'll see....

Well, I was able to catch the move on the retracement at the NY open.

As you can see from the attached chart, Price had come down sharply during the London session. When that happens, there is usually a retracement in the NY session. As you can see from the chart, at the time of the NY open the M15, M30, and H1 stochs were all below 20. M15 and M30 were turning up. H1 hadn't starting going up yet, and H4 was nearly straight down but, again, this was a countertrend trade. Also, my stop was in real tight, so not much money was at risk.

I put a take profit order in because I was going to be at work and would not be able to monitor the trade actively. As you can see, even though the M15 and M30 stochs went up and down after entering the trade, the H1 stayed nice and steady. There was never any doubt that the take profit would be met. I chose the 50% retracement level because that was a little safer, but I wish I would have chosen 61.8%. Oh well, that's 40 pips over 2 trades in the last 12 hours with very little risk or worry.

Hi Tommy,

Everyone should learn to post such well-commented charts as yours! Really helps us understand exactly what your thinking was.

Quick question: Why did you place your TP above the 50% retracement, rather than just below, if you thought price might retrace there?

Many thanks!

Hi Tommy,

Is there any update of your trading from 23-07-07 to 27-07-07? Or are you too busy with your tradings and got no time to update us?

Hi Tommy,

I've just started a new thread called, The Art of Trading with MTF Stochastics.

It's located at http://www.forexfactory.com/showthre...57#post1651557

I hope you will come down to offer a slice of your greater knowledge from time to time. Would be most appreciated...

Thanks so much!