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The Art of Trading with MTF Stochastics

  • #81
  • Oct 22, 2007 12:25pm Oct 22, 2007 12:25pm
Hello,


This week I will focus on trading the AUD/JPY pair. Less costly to trade. Here is a Spud trade I made this morning for 42+ pips. I based my decision on three stochs coming out pretty much together of an oversold area and plenty of room between the two support levels. I try to focus my trades during high volatility periods and 3:00gmt, 10:00gmt and 16:00 gmt fit the bill.
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Unus pro omnibus, omnes pro uno
  • #82
  • Oct 22, 2007 12:40pm Oct 22, 2007 12:40pm
Nice trade, Moneda!

I've not yet traded that pair, trying to focus on these three: eurjpy, eurusd, gbpusd.

Thanks for sharing with us...
Jeff Singer, K2KV
  • #83
  • Edited 1:29pm Oct 22, 2007 12:50pm | Edited 1:29pm
That pair was set to have a large move, based on announcements. Gold is down a bunch, like $14 an oz., and the Jen has been stronger today than for the last couple of weeks. Like a lot of other pairs today, it should have tested a low from as much as 2-4 months ago. If it did go a lot lower than where you got out, look for it to bounce back as the week progresses. The GBP/JPY tested lows from back in July and is looking to move even a little lower, before a recovery looks likely. Of course, all that is theory, not written in stone. As always, trade what you see.

Looked at chart: Moved over 200 pips south and has now rebounded about 150, back to nearly where it started this morning. Talk about your escalator ride down and rubberband it back up.
  • #84
  • Oct 22, 2007 5:15pm Oct 22, 2007 5:15pm
anyone see the 15m /30m on the G/Y right now? It looks to me like we could see a long coming. The 5,3,3 is entering what looks like the begining of an upward move of the 50,10,20 and the 20,10,20. i know its not the ideal time to trade but i unfortunately have a day job. could anyone give me there opinion on this set up..?? It sorta looks like the 15m will turn upwards soon and then move the 30m the same way.. but id really like someone elses veiw on this
  • #85
  • Oct 22, 2007 5:25pm Oct 22, 2007 5:25pm
TraderX,


I think is a bit premature....ranging for several hours......30 and 60 in the overbought area...Let the stoch show the way. I would wait for the 15 to come back and join the other two if that turns out to be the direction(long).


Unus pro omnibus, omnes pro uno
  • #86
  • Edited 5:47pm Oct 22, 2007 5:31pm | Edited 5:47pm
yes i too think it is premature ...but worth watching ... thank you for you for the reply.when you say wait for the 15m to come back and join the 30 and 60 do you mean let the wave (50,10,20 and 20,10,20) finish rising , then fall, then possibly catch it when it joins the 30 and 60?

k2kv...what do you think about that???
  • #87
  • Oct 22, 2007 5:55pm Oct 22, 2007 5:55pm
Trader X,


What I see is that the 4hr. crossed the 23.6 level, the 15min is pointing up so IMHO I would wait for the 15min to join the 30/60 and watch the momentum of price action....maybe look at a lower tf like the 5min....are the candles bullish and showing no tails? I am not sure what you mean by the wave, can you explain it to me?

Thanks
Unus pro omnibus, omnes pro uno
  • #88
  • Oct 22, 2007 6:05pm Oct 22, 2007 6:05pm
sorry about that.. the wave is a slang term i use to describe the stoch. 50,10,20 and the stoch. 20,10,20...spud used to talk about waiting for these stochs. to to all be going the same direction in a nice smooth parallel fashion...( they sort of form a wave ) then wait for the 5,3,3, stoch to cross through it and turn to join with it ...thats where you would look to get in.there were other things to consider as well but thats what i mean by the wave
  • #89
  • Oct 22, 2007 7:16pm Oct 22, 2007 7:16pm
Trader_X.


Thanks for the explanation. A long is looking better.

Good Luck
Unus pro omnibus, omnes pro uno
  • #90
  • Oct 23, 2007 6:32am Oct 23, 2007 6:32am
Hi all,

After most pairs experienced long runs up last night, the 4H stoch is, on most charts, neither oversold nor overbought.

Frankly, with the 4H mostly in the middle of our charts (50's - 60's), I have no idea what kind of stoch trades I should be looking for, since I've been relying on the 4H extremes for guidance.

Anyone care to chime in with some trading ideas for the day?

Thanks!
Jeff Singer, K2KV
  • #91
  • Oct 23, 2007 8:00am Oct 23, 2007 8:00am
Hi all,

I decided to take this trade, just exited a few minutes ago with +12 pips. I entered when both 15M & 30M had clearly crossed down over 76.4. I watched after the 15M (aqua) had crossed, and once the 30M (blue) followed, price moved fairly quickly. Only spent fifteen minutes in the trade. Entered at 163.44, out at 163.32; price still moving lower (as usual) as I write this.

Someday I hope to overcome my fear of loss when I'm ahead!
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Jeff Singer, K2KV
  • #92
  • Edited 9:12am Oct 23, 2007 8:37am | Edited 9:12am
Don't ever feel bad about taking profit. +12 is a nice trade. The thing to do is not give it back!! I would look at some larger time frames, like the day chart and see where your s/r are there via pivot points. There may be a chance to re-enter and continue the short or it is going to find support and bounce back up. No more announcements set for today, until much later, so what I have noticed is that makes the s/r lines come more into play and psychological levels with .50's and .00's

Looking at a possible short on the GBP/USD. Stochs are over 50 on the 4hr and just below 80 on the day chart, so slightly oversold, and the day chart candle is up against R1. This is the 4th rejection of that point and would indicate a strong move back toward 2.0390/50 level. Unless it breaks through and then it would push toward 2.0650 which is R2. Just watching now.

2nd update: Looking more like it wants to continue up and test 2.0550 and maybe more. Still watching. A rejection at this 2.0500 area would probably send it back toward 2.0450 or lower and make the short look good. Patience.
  • #93
  • Oct 23, 2007 9:28am Oct 23, 2007 9:28am
Hi PipAV8tor,

Thanks for the good advice.

Actually, I do watch the pivot and S & R -- have them automatically display in my charts and also subscribe to a service -- and I'm always aware of them. In this case I was wide open going short, nothing in the way for miles, except perhaps the 76.4 fib, so I felt comfortable entering the trade. But the funny thing is, I didn't really think about how open it was when I began to worry about keeping my small gain.

No doubt, I should have taken the open space as a signal to remain in. And, don't you know it, it stopped dead in its tracks at exactly the 76.4 fib, a good 50 pips away from my entry!

Thanks for jogging my head!

Do you normally trade after noon EST? I find prices kind of "drift" around once the London sesion closes.

Quoting PipAV8tor
Don't ever feel bad about taking profit. +12 is a nice trade. The thing to do is not give it back!! I would look at some larger time frames, like the day chart and see where your s/r are there via pivot points. There may be a chance to re-enter and continue the short or it is going to find support and bounce back up. No more announcements set for today, until much later, so what I have noticed is that makes the s/r lines come more into play and psychological levels with .50's and .00's

Looking at a possible short on the GBP/USD. Stochs are over 50 on the 4hr and just below 80 on the day chart, so slightly oversold, and the day chart candle is up against R1. This is the 4th rejection of that point and would indicate a strong move back toward 2.0390/50 level. Unless it breaks through and then it would push toward 2.0650 which is R2. Just watching now.

2nd update: Looking more like it wants to continue up and test 2.0550 and maybe more. Still watching. A rejection at this 2.0500 area would probably send it back toward 2.0450 or lower and make the short look good. Patience.
Jeff Singer, K2KV
  • #94
  • Oct 23, 2007 9:37am Oct 23, 2007 9:37am
I am at my "real" job right now, so I watch in the background. I am on CST. I miss alot of prime time because of this place, but I can login to my home pc from here. I don't usually trade much in this time because there isn't much activity, but I have noticed the GBP likes to drift south against the USD and JPY until about 4 EST. Not always. Just happened to be looking today. I do a lot of evening trading, that is why I like the GBP/JPY. I also watch the AUS and NZD at night. In the next 30-60 days, I hope to be out of here and just trading. We'll see how that goes.
  • #95
  • Edited 10:31am Oct 23, 2007 9:50am | Edited 10:31am
Quoting PipAV8tor
Don't ever feel bad about taking profit. +12 is a nice trade. The thing to do is not give it back!! I would look at some larger time frames, like the day chart and see where your s/r are there via pivot points. There may be a chance to re-enter and continue the short or it is going to find support and bounce back up. No more announcements set for today, until much later, so what I have noticed is that makes the s/r lines come more into play and psychological levels with .50's and .00's

Looking at a possible short on the GBP/USD. Stochs are over 50 on the 4hr and just below 80 on the day chart, so slightly oversold, and the day chart candle is up against R1. This is the 4th rejection of that point and would indicate a strong move back toward 2.0390/50 level. Unless it breaks through and then it would push toward 2.0650 which is R2. Just watching now.

2nd update: Looking more like it wants to continue up and test 2.0550 and maybe more. Still watching. A rejection at this 2.0500 area would probably send it back toward 2.0450 or lower and make the short look good. Patience.
update 3: looking more and more like it just wants to consolidate right where it is for now. Not enough activity this time of day, but sometimes there is enough to cause a move/re-trace. Just wishful thinking today and fortunately "patience" kept me on the sideline. :
  • #96
  • Oct 23, 2007 2:58pm Oct 23, 2007 2:58pm
Hi PipAV8tor,

Patience is indeed a virtue...

Your thinking was right on spot, but the market must have had its own ideas. Glad you waited, nice work!

I'm in NY, EST. Once I get my son off to school, my trading time is limited to 9-12 AM unless I want to get up at 3 AM for the London open. You mentioned that you trade in the evening. I wonder what times you find most productive.

Thanks!

Quoting PipAV8tor
update 3: looking more and more like it just wants to consolidate right where it is for now. Not enough activity this time of day, but sometimes there is enough to cause a move/re-trace. Just wishful thinking today and fortunately "patience" kept me on the sideline. :
Jeff Singer, K2KV
  • #97
  • Oct 23, 2007 3:55pm Oct 23, 2007 3:55pm
K2KV,

Totally depends on announcements. Tonight with the JPY @ 7:50 EST could cause a little action. The AUS and NZD usually announce at 9:30 EST and they can cause some movement. The AUS may move a lot depending on the price and activity related to Gold throughout the day, as well. Without an announcement of some type, it is at least 10 or 11 my time before anything gets going. I can sometimes catch some early morning action, like maybe 6 or 7, but the kids are getting ready for school, so it is hard to focus and then I am off to the cell errr... work.
  • #98
  • Oct 25, 2007 3:24pm Oct 25, 2007 3:24pm
Hi guys,

I took a potentially good trade this afternoon, but really messed it up and thought I'd share, whith the hope that others might learn something in the process.

I was trading based on both the 15M & 30M crossing up over 23.6. The 15M had crossed, and the 30M was just about to cross when I took a brief phone call. Once I hung up I turned to my charts again, the price and 30M stoch had jumped up more than I was expecting, but I took the trade anyway at 163.35 ("A" on chart below), with a 20 pip SL.

Sure enough, price immediately retraced around -10 and flopped around a bit, heading down to -15 or so, and I began to get itchy. So, I waited, and it came back to around -7, then back down to -16, and seemed bent on going even lower. Eventually it came back to -11 but I had to leave the house for awhile, so I decided to get out at -11 ("C" candle on chart) and minimize my loss.

Stupid, stupid, stupid...

A couple of hours later I revisited my charts and -- sure enough -- I had been right all along! Price had moved all the way up to 163.64 with hardly another retrace along the way! Had I remained in the trade, I would have seen a profit of +29, instead of my -11. And, if I had entered at the right time as planned ("B" on chart), I would have been in at around 163.00, which would have added another +35 pips to my trade, for a total of more than +60 on a slow afternoon trade!

I write this as a lesson for myself, and possibly for others who might be as new to the game as I am.

So, I guess the lesson is:

1. If you miss your opportunity, don't chase the trade.

2. Once you make your decision to take a trade, stay with it! Every time I get out early due to drawdown, I am guaranteed a loss and, almost without exception, my initial decision turns out to have been right all along!

Can't seem to shake this bad habit. Any advice for this novice?

Thanks!
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Jeff Singer, K2KV
  • #99
  • Oct 25, 2007 3:44pm Oct 25, 2007 3:44pm
K2KV,

I feel your pain. I'm sure others do also. There are really only the 2 choices. You made a sound choice, because you had to leave, just take your lumps and live to trade another day. The other choice is to set a stop you can stomach, maybe at the Fib line just below your A candle, and set a reasonable profit limit of plus 10 or 15 pips and let it play out. In this case, it would have worked out, but you could have also had a greater loss. Its a coin flip. The good news is, you will have many opprotunities to make up for one bad moment. Lots of JPY announcements tonight, if I recall. Should make for some good movement.
  • #100
  • Oct 25, 2007 4:14pm Oct 25, 2007 4:14pm
Jeff,

Thanks for sharing a negative result. The circumstances made it difficult for you because you could not monitor your trade as you usually do but you did exercise restrain/discipline by closing your trade for a small loss. If there is anything that I can add is that the eur/jpy and aud/jpy need breathing room so in my case as long as I am going with the trend, I will give it as much as 50 pips. In most cases it has turned a negative entry into a profitable one after a price rebound. In order not to panic is important to stick to an amount that you does not cloud your decision with fear and/or greed. There is plenty of info on money management out there but I am sure that you have read that stuff already. Jacko's strategy is to get out and then hop back in at the exit price after the rebound.

You are not alone....I've had my share of dumb mistakes.... Here is one for you....I once lost over 200 pips after placing a trade at my in-laws on my way to the airport only to find myself stuck in the airport, unable to access my account and guess what? I have forgotten to put a stoploss!
Unus pro omnibus, omnes pro uno
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