what do you mean when you say ..."the smaller TF should be one step ahead (one candle) of the longer TF"? Could you please elaborate on that and possibly post a chart? Thanks in advance...
The Art of Trading with MTF Stochastics
Hello all, and welcome to our discussion. All I can say is "WOW!" Everyone has contributed such an enormous amount of valuable information, and I'm already feeling much more confident in my trading. Actually, Im feeling quite grateful.
Charlies: I focused mostly on the rubber band trade today, per your explanation, and early this afternoon took two 30-pip trades -- one on EURUSD and the other GBPUSD. I really love the simplicity of the system. I'm using the 4H for direction, and then taking the 15M once it crosses back over os/ob.
Rialto: I also somehow completely missed the Rope thread theory! Thanks for mentioning it, and thanks to endroute for posting the link! I'll check it out over the weekend.
PipAV8tor: I'm with you. My best trades occurred when I was forced to leave the computer. If I sit and watch, I almost always kill what would have become really good trades.
I've tried using the scalping technique, but I've found it nearly impossible to locate a setup where at least two stochs are above the 61.8 or below the 38.2 together. For scalping short TF pips, I prefer to follow Spud's "Quicker Pipping" instructions, and usually come out ahead when I find a good setup.
No doubt, like many others, my biggest obstacle to success is my lack of patience. Either I get in too soon and the trade goes bad, or I make a good trade but exit before it's had a chance to blossom, as soon as I see price retracing. I've often thought I should just trade the downdraw, i.e., if I expect price to go long, I should go short, and earn some pips on the inevitable retrace!!
I think the reason I'm feeling such clarity today is that many of the folks who have come down to join us have taken Spud's brilliant concepts and actually put them to work, each in his own way. Over time, they've discovered what works and what doesn't, and have gained a more experienced view of how to place these MTF Stochastics trades. And each and every one of you has been so incredibly generous in your willingness to share!
Thanks again, everyone!
Charlies: I focused mostly on the rubber band trade today, per your explanation, and early this afternoon took two 30-pip trades -- one on EURUSD and the other GBPUSD. I really love the simplicity of the system. I'm using the 4H for direction, and then taking the 15M once it crosses back over os/ob.
Rialto: I also somehow completely missed the Rope thread theory! Thanks for mentioning it, and thanks to endroute for posting the link! I'll check it out over the weekend.
PipAV8tor: I'm with you. My best trades occurred when I was forced to leave the computer. If I sit and watch, I almost always kill what would have become really good trades.
I've tried using the scalping technique, but I've found it nearly impossible to locate a setup where at least two stochs are above the 61.8 or below the 38.2 together. For scalping short TF pips, I prefer to follow Spud's "Quicker Pipping" instructions, and usually come out ahead when I find a good setup.
No doubt, like many others, my biggest obstacle to success is my lack of patience. Either I get in too soon and the trade goes bad, or I make a good trade but exit before it's had a chance to blossom, as soon as I see price retracing. I've often thought I should just trade the downdraw, i.e., if I expect price to go long, I should go short, and earn some pips on the inevitable retrace!!
I think the reason I'm feeling such clarity today is that many of the folks who have come down to join us have taken Spud's brilliant concepts and actually put them to work, each in his own way. Over time, they've discovered what works and what doesn't, and have gained a more experienced view of how to place these MTF Stochastics trades. And each and every one of you has been so incredibly generous in your willingness to share!
Thanks again, everyone!
Jeff Singer, K2KV
Hi Kermut,
Yes, I share your concern about entering a trade based on still developing candles. There are a couple of thing that I use with the pound/yen:
Wait for the close of the targeted candle.
Draw a trendline on the Stoch window to get a sense of direction of particular timeframe
Try to go with the 4hr.trend because even if I prematurely enter and find myself dealing with a bigger drawdown, the volatility will turn things around....most of the time... unless there is a new trend in town!
Keep an eye on pivots, support/resistance levels. If you are looking at a 15min candle that is nearing an important level and you still have 2 or three candles for the 1hr. to close, you may want to wait it out....but what if the 15min has no lower wick and it breaks through a significant level? Then, I may decide that the momentum is strong enough to push the 1hr. along.
Trade the elasticity of the 15min. This approach works well as long as the higher time frames are in an overbought/undersold area or near it. With the pound/yen you see the 15min take off like a rocket and the higher time frames stay at the launchpad quite often.
These observations have been made when my TP is 10-20 net pips.
Hope this helps
Yes, I share your concern about entering a trade based on still developing candles. There are a couple of thing that I use with the pound/yen:
Wait for the close of the targeted candle.
Draw a trendline on the Stoch window to get a sense of direction of particular timeframe
Try to go with the 4hr.trend because even if I prematurely enter and find myself dealing with a bigger drawdown, the volatility will turn things around....most of the time... unless there is a new trend in town!
Keep an eye on pivots, support/resistance levels. If you are looking at a 15min candle that is nearing an important level and you still have 2 or three candles for the 1hr. to close, you may want to wait it out....but what if the 15min has no lower wick and it breaks through a significant level? Then, I may decide that the momentum is strong enough to push the 1hr. along.
Trade the elasticity of the 15min. This approach works well as long as the higher time frames are in an overbought/undersold area or near it. With the pound/yen you see the 15min take off like a rocket and the higher time frames stay at the launchpad quite often.
These observations have been made when my TP is 10-20 net pips.
Hope this helps
Unus pro omnibus, omnes pro uno
- #75
- Oct 21, 2007 3:50pm Oct 21, 2007 3:50pm
Good trade reguardless, but I thought that an elasticity trade only applied to the 15m and the other stoch were all either over bought or sold? One other question what is your typical TP, I try to focus on getting 10-20 pips and getting out, what is everyones take on this.
I wouldn't get in a trade unless I was expecting a move of the 10-20 pip range. There are too many good opportunities throughout a 24 hr. period. That is where the pivot pts. on your 1hr or 4hr or day chart make a difference. They can give you an idea of how many pips to look for, based on s/r. The best scenario is to be watching your trade and then lock in the profit by moving your stop as the trade develops up or down. The risk in that is a quick retrace that takes out your stop before you are done riding. Then you have to decide whether or not to re-enter. The good part is you got stopped out with profit.
- #77
- Oct 22, 2007 9:41am Oct 22, 2007 9:41am
- Joined Jan 2007 | Status: Stochastic pipster | 1,657 Posts
Hi Moneda,
Very good advice indeed, regarding the 4H trend and pivots, S & R, etc. There's no point in stepping on your accelerator when you have a stop sign ten feet in front of you!
For me, however, I pay very little attention to when a candle closes, since I've always felt that the actual close of a candle is somewhat arbitrary, and market price will move however it wants without any regard whatsoever to where a candle might be in it's cycle. I make my trades only when price and/or stochs reach or pass a certain level, whether a candle has closed or not.
I do, of course, pay attention to candle formations, but that's another story altogether...
Very good advice indeed, regarding the 4H trend and pivots, S & R, etc. There's no point in stepping on your accelerator when you have a stop sign ten feet in front of you!
For me, however, I pay very little attention to when a candle closes, since I've always felt that the actual close of a candle is somewhat arbitrary, and market price will move however it wants without any regard whatsoever to where a candle might be in it's cycle. I make my trades only when price and/or stochs reach or pass a certain level, whether a candle has closed or not.
I do, of course, pay attention to candle formations, but that's another story altogether...
Hi Kermut,
Yes, I share your concern about entering a trade based on still developing candles. There are a couple of thing that I use with the pound/yen:
Wait for the close of the targeted candle.
Draw a trendline on the Stoch window to get a sense of direction of particular timeframe
Try to go with the 4hr.trend because even if I prematurely enter and find myself dealing with a bigger drawdown, the volatility will turn things around....most of the time... unless there is a new trend in town!
Keep an eye on pivots, support/resistance levels. If you are looking at a 15min candle that is nearing an important level and you still have 2 or three candles for the 1hr. to close, you may want to wait it out....but what if the 15min has no lower wick and it breaks through a significant level? Then, I may decide that the momentum is strong enough to push the 1hr. along.
Trade the elasticity of the 15min. This approach works well as long as the higher time frames are in an overbought/undersold area or near it. With the pound/yen you see the 15min take off like a rocket and the higher time frames stay at the launchpad quite often.
These observations have been made when my TP is 10-20 net pips.
Hope this helps
Jeff Singer, K2KV