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  • #1,141
  • Aug 16, 2007 11:28am Aug 16, 2007 11:28am
Quoting mtrmth
i read spuds theory on how to trade the elastic, rubber band, way, and it is amazingly simple. now all i have to do is get the settings. i went to the paper clip and tried to downlaod v.2, but windows will not open it. something to do with mq4?? how do i get to read it??? also, you mentioned emda explains this in another thread. is that thread under forums or trading systems?? i see the market has had a shock and awe strike on it this past week, wish i would have had some time to play, but i am sure the volitility will continue for a while. have a couple of ideas i want to try and combine and see if a 90% positive trading method cannot be figured out. i could be wrong on that, the market can be very un kind, but hey, it is worth a shot. thanks for any help you can give me.
As for the mq4, you need to open it with a meta trader station like those from northfinance or interbankfx. from within the trading station, you right click the screen and go to load template. from there you find the file you want....

Thanks so much Spud...
  • #1,142
  • Aug 16, 2007 5:38pm Aug 16, 2007 5:38pm
Hi all,

Spud has said that he only uses stops to protect his account, not each trade, and I follow the same rule (I stopped using tight stops when I felt I was getting hunted down all the time -- I was right!). However, he is a most accomplished and experienced trader. I still have a lot to learn, and still find myself entering some trades when I really should not have. Some of you may do the same.

I never leave my screen when I'm in a trade, so I can get out whenever I need/want to, but I don't think I have a really good handle on how much drawdown I should tolerate before getting out of a trade that seems to be going bad, despite its eventual outcome.

Seems that most of my trades (mostly US/JY, shorter time frames) tend to go against me the moment I enter, even if price eventually moves in my favor. So, I wonder how each of you handles the issue of tolerating drawdown, and when do you exit a trade that seems to be going south fast despite all indicators. Where do you draw the line, and how do you watch your funds going down without getting stressed?

Thanks for all your help!
Jeff Singer, K2KV
  • #1,143
  • Aug 16, 2007 6:04pm Aug 16, 2007 6:04pm
Quoting k2kv
Hi all,

Spud has said that he only uses stops to protect his account, not each trade, and I follow the same rule (I stopped using tight stops when I felt I was getting hunted down all the time -- I was right!). However, he is a most accomplished and experienced trader. I still have a lot to learn, and still find myself entering some trades when I really should not have. Some of you may do the same.

I never leave my screen when I'm in a trade, so I can get out whenever I need/want to, but I don't think I have a really good handle on how much drawdown I should tolerate before getting out of a trade that seems to be going bad, despite its eventual outcome.

Seems that most of my trades (mostly US/JY, shorter time frames) tend to go against me the moment I enter, even if price eventually moves in my favor. So, I wonder how each of you handles the issue of tolerating drawdown, and when do you exit a trade that seems to be going south fast despite all indicators. Where do you draw the line, and how do you watch your funds going down without getting stressed?

Thanks for all your help!
K2,

I'm not sure what you are referring to? Is it normal market conditions or is it the violent conditions seen recently? I trade the stoch's the same/differently than spud. It all depends. Give some examples of trades.

Under violent conditions you need to drop out of higher TF's IMO and look to the shorter. But maybe that is just me.

traden4x
  • #1,144
  • Aug 16, 2007 9:41pm Aug 16, 2007 9:41pm
Hi Traden,

I guess I was referring to both. For example, today I took a short trade that had my heart beating much too fast when it immediately turned against me, then up and down repeatedly, and I held on when it went to -24 pips. It came back, waffled all over the place again, and came back down to -5, where it settled for a bit. As it started back up again I decided to "get out while the gettin' was good." I got scared out and exited -6 pips, thankful to only suffer the smaller loss.

No more than five minutes passed when the price moved 120 pips in my direction, but I had already left the trade. I don't usually get upset when I trade, but that was definitely frustrating.

Honestly, after reviewing my entry, I realized that I had not entered according Spud's firm rules. Rather, all stochs were well below 23.6, no sign of turning back. I took the trade with confidence because I've observed this setup a number of times before, and it always proved fruitful. I just wasn't prepared for the drawdown, so I'm wondering what other folks are willing to tolerate.

The market did seem a little wild...

Jeff
Jeff Singer, K2KV
  • #1,145
  • Aug 17, 2007 3:14am Aug 17, 2007 3:14am
Quoting k2kv
Hi Traden,

I guess I was referring to both. For example, today I took a short trade that had my heart beating much too fast when it immediately turned against me, then up and down repeatedly, and I held on when it went to -24 pips. It came back, waffled all over the place again, and came back down to -5, where it settled for a bit. As it started back up again I decided to "get out while the gettin' was good." I got scared out and exited -6 pips, thankful to only suffer the smaller loss.

No more than five minutes passed when the price moved 120 pips in my direction, but I had already left the trade. I don't usually get upset when I trade, but that was definitely frustrating.

Honestly, after reviewing my entry, I realized that I had not entered according Spud's firm rules. Rather, all stochs were well below 23.6, no sign of turning back. I took the trade with confidence because I've observed this setup a number of times before, and it always proved fruitful. I just wasn't prepared for the drawdown, so I'm wondering what other folks are willing to tolerate.

The market did seem a little wild...

Jeff
Jeff,

I have been exactly where you are now. Over the last several weeks, I have had to learn quite a few painful lessons about exercising patience with this system. When you get the right entry, it should very rarely, if ever, go negative on you. I have attached a slide to show what I mean, and illustrate a common mistake I have made too many times recently, but will not make again.

As you see the slide, all the stochs are beneath 20 and turning up. At the point where the M15 stoch crosses 20, there is a really nice Morning Star candle pattern, which is a reversal pattern. Notice that the M30 stochs are pointing up but they have not crossed 20 yet. Over the past several weeks, based on the M15 cross, the strong candle pattern, and the fact that the M30 stochs are pointing up, I would have gone long. Anyone who did that, however, had the position turn around on them and go negative by roughly 300 pips. Sadly, I have been burned by this a LOT in the past several weeks.

Now that I have learned my lesson, though, I knew to not get tempted by the initial M15 cross, as the M30 hadn't crossed yet. I know, now, that if the M15 crosses 20 way before M30 does, that the M15 will turn back down and then the second upturn in M15 is the one that will pull the M30 up over 20 and signal the real move. So that's what I waited for. When I got the right entry, I made 124 pips in about 20 minutes, and it didn't go negative on me once.

Spud is oh so correct when he mentioned over an over again to WAIT until M15 & M30 were out of the 80/20 zones.

Good luck.
Attached Image (click to enlarge)
Click to Enlarge Name: Entering too early.jpg Size: 95 KB
  • #1,146
  • Aug 17, 2007 6:47am Aug 17, 2007 6:47am
Hello jnevins,

Thanks very much for the explanation.

Much appreciated.
All flesh is as grass
  • #1,147
  • Aug 17, 2007 7:33am Aug 17, 2007 7:33am
Quoting k2kv
Hi Big Sky,

I also trade the smaller time frames, similar to your method, except that I watch the 15m & 30m, and trade the 5m. I find the 1h generally too slow to catch up with the others (it's always opposite!) if I'm trading the 5m. BTW, you said you're watching the 15m & 60m. What about the 30m?

My biggest problem I have is that, 9 times out of 10, as soon as I enter, the price immediately moves fast against me, even if the trade eventually goes positive. Makes my heart pump too hard, still working on this. I mostly trade US/JY, occasionally EUR/$.

it no wonder your heart is pumping fast since you are trading the U/J. The price rhythm of that pair can cause your heart to skip if you have prolonged exposure to the Yen. Read the Surgeon General's warning.

on the serious side. What can releave the tension is to trade with a smaller lot size.
  • #1,148
  • Aug 17, 2007 7:49am Aug 17, 2007 7:49am
Quoting k2kv
Hi all,

Spud has said that he only uses stops to protect his account, not each trade, and I follow the same rule (I stopped using tight stops when I felt I was getting hunted down all the time -- I was right!). However, he is a most accomplished and experienced trader. I still have a lot to learn, and still find myself entering some trades when I really should not have. Some of you may do the same.

I never leave my screen when I'm in a trade, so I can get out whenever I need/want to, but I don't think I have a really good handle on how much drawdown I should tolerate before getting out of a trade that seems to be going bad, despite its eventual outcome.

Seems that most of my trades (mostly US/JY, shorter time frames) tend to go against me the moment I enter, even if price eventually moves in my favor. So, I wonder how each of you handles the issue of tolerating drawdown, and when do you exit a trade that seems to be going south fast despite all indicators. Where do you draw the line, and how do you watch your funds going down without getting stressed?

Thanks for all your help!

In my way of thinking this depends on
- how many pips are you trying to earn each time. The more you want the greater likelihood of an unpleasant drawdown.
- what is the risk ratio of your trade relative to your account size. The smaller it is the more drawdown you may be able to tolerate.
- what is the daily volatility swing or daily range
- what are the characteristics of the pair you trade - some pairs are erratic and others are a smoother back and forth price action.
- how much are you willing to lose. in other words, what loss can you sustain and not reduce your ability to trade at the risk ratio level you are now.

hope that helps.
  • #1,149
  • Aug 17, 2007 8:19am Aug 17, 2007 8:19am
Quoting Tommy_C
Jeff,

I have been exactly where you are now...
...Spud is oh so correct when he mentioned over an over again to WAIT until M15 & M30 were out of the 80/20 zones.

Good luck.
Hi Tommy,

Nice to see you. I wondered where you'd gone!

Thanks for taking the time to offer your screenshot. Mine looks nearly identical, though I'm about to kill the 5.3.3 since I no longer rely on it.

You've made an interesting observation and a crystal clear explanation, which is most helpful and definitely appreciated.

My entry, however, was not a matter of waiting for the stochs to both cross (I use 23.6 & 76.4). I entered short when all stochs (15/30/60) crossed below 23.6 and held there for awhile without any sign of turning up. I believe this is generally a good entry, just not something I should be in myself, since it is obviously subject to huge retracement/turnaround, and I prefer to get my thrills elsewhere.

So, if I follow your thinking (and I do), most of my successful trades were probably not entered optimally, as most turned sharply against me before going positive. Back to the drawing board...

Thanks!
Jeff Singer, K2KV
  • #1,150
  • Aug 17, 2007 8:29am Aug 17, 2007 8:29am
Quoting KudzuFX
it no wonder your heart is pumping fast since you are trading the U/J. The price rhythm of that pair can cause your heart to skip if you have prolonged exposure to the Yen. Read the Surgeon General's warning.

on the serious side. What can releave the tension is to trade with a smaller lot size.
Hi Kudzu,

Funny comment, though true!

This U/J pair is more volatile this week than it was last week. I trade it because the spread is usually 1.8 on Oanda (though it's up to 4.0 this morning -- a good sign for me to stay out!) and a definable trend.

Good point about the smaller lot sizes, but I'm still wondering how much drawdown other folks generally tolerate in their typical trade.

Thanks!
Jeff Singer, K2KV
  • #1,151
  • Aug 17, 2007 8:36am Aug 17, 2007 8:36am
Quoting k2kv
Hi Tommy,

Nice to see you. I wondered where you'd gone!

Back to the drawing board...
Jeff, that's exactly where I have been the last several weeks: at the drawing board. After some quick early success with this system, I got waaaayyy too cocky and, as Spud has admitted himself, I began to think that I could predict what the stochastics were going to do. Consequently, I made tremedously huge errors getting into trades way too early and wound up paying for it.

So I have been quiet while I got my head together and learned how to wait for the trade to come to me. You know what's interesting, though... There are so many different trading systems out there, and any one of them can produce good solid results. No one system is really better than any other. What it really all boils down to is the trader himself. If a trader has mastered himself and can exercise the patience and discipline to wait for the optimum setup from whatever system he chooses to follow, then he will be successful long term. Without patience and discipline, even the most effective trading system will lead to numerous losses.

I think I have the patience now. We'll see as we get into next week....
  • #1,152
  • Aug 17, 2007 8:42am Aug 17, 2007 8:42am
Quoting KudzuFX
In my way of thinking this depends on
- how many pips are you trying to earn each time. The more you want the greater likelihood of an unpleasant drawdown.
- what is the risk ratio of your trade relative to your account size. The smaller it is the more drawdown you may be able to tolerate.
- what is the daily volatility swing or daily range
- what are the characteristics of the pair you trade - some pairs are erratic and others are a smoother back and forth price action.
- how much are you willing to lose. in other words, what loss can you sustain and not reduce your ability to trade at the risk ratio level you are now.

hope that helps.
Yes, it does. And very good advice (thanks!).

But I think I'm trying to learn what a "typical" trade should look like. For example, even if I had a few million dollars in my account (which I don't), I probably wouldn't want to see the price move 300 pips against me on a modest one-lot buy, even though I could easily sustain the loss and it would be just a miniscule percentage of my account.

Thanks very much for your input!
Jeff Singer, K2KV
  • #1,153
  • Aug 17, 2007 8:52am Aug 17, 2007 8:52am
Quoting Tommy_C
Jeff, that's exactly where I have been the last several weeks: at the drawing board. After some quick early success with this system, I got waaaayyy too cocky and, as Spud has admitted himself, I began to think that I could predict what the stochastics were going to do. Consequently, I made tremedously huge errors getting into trades way too early and wound up paying for it.

So I have been quiet while I got my head together and learned how to wait for the trade to come to me. You know what's interesting, though... There are so many different trading systems out there, and any one of them can produce good solid results. No one system is really better than any other. What it really all boils down to is the trader himself. If a trader has mastered himself and can exercise the patience and discipline to wait for the optimum setup from whatever system he chooses to follow, then he will be successful long term. Without patience and discipline, even the most effective trading system will lead to numerous losses.

I think I have the patience now. We'll see as we get into next week....

Well, you're absolutely right about that. For awhile, I had three different systems set up on my monitors, and I would wait for a good setup on one of them, even if the others did not agree. Sadly, since they never seemed to agree with each other, I began to lose confidence in them all! I found this made me crazier than I already am, so I've decided to devote my energies to just learning Spud's MTF system, particularly in light of his enormous willingness to help each and every one of us.

I've banned myself from trading today as the spreads are wider than usual and I need to just watch the screens for a day.

Take care...
Jeff Singer, K2KV
  • #1,154
  • Aug 17, 2007 3:34pm Aug 17, 2007 3:34pm
Quick question for anyone.... when determining the trend with the 1h or 4h do you use the 5stoch or 14stoch? I have not had to decide which to use until this morning when the 5stoch lead the 14stoch quite a ways.
thanks in advance
oh yea, I have been trading using the 1h as trend and buy/sell with that trend when the 15m and 5m line up for my entry.... it worked awesome until this morning!
N8
  • #1,155
  • Aug 17, 2007 3:43pm Aug 17, 2007 3:43pm
Quoting N8s
Quick question for anyone.... when determining the trend with the 1h or 4h do you use the 5stoch or 14stoch? I have not had to decide which to use until this morning when the 5stoch lead the 14stoch quite a ways.
thanks in advance
oh yea, I have been trading using the 1h as trend and buy/sell with that trend when the 15m and 5m line up for my entry.... it worked awesome until this morning!
N8
Hi N8s,

I can't answer your question with authority since I've asked it myself recently, but I'm wondering what constitutes your entry trigger.

Thanks!
Jeff Singer, K2KV
  • #1,156
  • Aug 18, 2007 9:54am Aug 18, 2007 9:54am
Hi all, what a great thread. I have read all the Stochs threads by Spud now 2...today will be 3 times and so far this month I am at 70% winning ratio. I know this will only get better. I have a quick question to summarize: Threre are 3 types of trades: 1. With the Elasticity we trade when the 4 hour and preferabbly the 1 hour are in ob or os territory. 2. We trade threads 3. We trade Escalator to pips with the 4 hour being our lead. These aren't all different systems but tools to help us all work together and even serve as filters for eachother right? This is just to see if I am on the right trail...thank you...Joe
  • #1,157
  • Aug 19, 2007 1:29am Aug 19, 2007 1:29am
Quoting N8s
Quick question for anyone.... when determining the trend with the 1h or 4h do you use the 5stoch or 14stoch? I have not had to decide which to use until this morning when the 5stoch lead the 14stoch quite a ways.
thanks in advance
oh yea, I have been trading using the 1h as trend and buy/sell with that trend when the 15m and 5m line up for my entry.... it worked awesome until this morning!
N8
Personally, I have both the 5 and the 14 on my charts for three different timeframes: 15, 30, and H1. The relationship between the 5 and the 14 can be a tricky one but an easy way to think of it is that the 5 is the short term trend and the 14 is the longer trend. When the 5 pulls away from the 14, it *usually* means that it price is just making a temporary pull away from the longer trend, and will *usually* snap back to the longer trend. When the two move together, it is a very powerful signal. In fact, I usually look for that as my ideal setup: the 5 & 14 either above 80 or below 20 and turning together. That's just about the safest entry possible.

You should study the chart I attached. I have highlighted some of the patterns that I look for. I use the 14 as my indicator of the trend, and I use the 5 to either confirm that we are moving in the direction of the trend (when they are both moving together), or are in a countertrend pullback (when the 5 pulls quickly away from the 14).

In the end, the interpretation is more art than science and it takes a lot of practice. Like Spud says -- spend hours watching the charts (without trading) to get a feel for how the stochastics move together.
Attached Image (click to enlarge)
Click to Enlarge Name: Interaction between 5 & 14 stochs.jpg Size: 78 KB
  • #1,158
  • Aug 19, 2007 10:42am Aug 19, 2007 10:42am
MTF Stochastic.

You may like this

By 2 great coders Mladen & Fxbs

Mart
Attached Image
Attached File(s)
File Type: mq4 All Stochastic.mq4   9 KB | 915 downloads
----o00o--°(_)°--o00o----
  • #1,159
  • Aug 19, 2007 2:34pm Aug 19, 2007 2:34pm
ok guys and girls, i am having a difficult time understanding how to set up my charts. i have the stochs on each chart, but not multiple stochs on the chart. i am an older fart, and did not do well in programming computers when i was in school. the apple II was just released and available for the public and i learned on that, that is how old i am!!! i can dela with windows pretty well, but alot of the software i see for charts is something i have to have explained to me in detail, or shown to me until so i can understand it. i have good intelligence, but sometimes my common sense evades me. once the light turns on, i am good to go. it is probably something simple i am missing, but that is what usually happens. if there is a link for a template or a step by step walkthru that someone could help me with, it would be appreciated. you can pm me instead of tying up the thread with your reply. it would be better left to letting everyone know when a good trade is coming. thanks again for the help.
  • #1,160
  • Aug 19, 2007 3:01pm Aug 19, 2007 3:01pm
mtrmth,

Since you already have your charts set up with stochs you're half-way there.
To place another stoch in the same window as your first stoch, simply click on the Navigator icon on the icon bar (looks like a scrambled egg). From the dropdown indicator list, select "Stochastic" and drag it into your existing stochastic window.

A window will open. Select the input tab and select your weapon (14.4.3, or 5.3.3). Voila! To close the navigator list, simply click on the scrambled egg icon again.

If I've not hit the target and you're trying to create something else, there are many templates available within this thread, but I'm not sure where they are offhand; I'm sure someone else will chime in for you.

Oh -- I also started with an Apple IIe, so you're probably in my age range (60). But, I'm not that old!! You're only as old as you think you are...

Hope that helps!
Jeff Singer, K2KV
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