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The Art of Trading with MTF Stochastics

  • #281
  • Nov 14, 2007 9:32pm Nov 14, 2007 9:32pm
Hi Canuck!

Thanks for sharing these charts with us. Your two-screen entry system looks very interesting, though trading the M1 tends to make me a little crazy. But it makes sense and is a classic rubber band trade, with modified time frames.

Please let us know how you progress with this method.

See you in the trenches...

Quoting CanuckCT
I'd like to review 2 charts.

First the m15 chart shows a setup w spud MTF (I'm talking about the move up at the end of the chart). Have to be careful because the H4 is coming down, but in my opinion still very tradeable pattern because of the orderly way the M15, M30 and H1 come up from oversold and knowing that the pair is volitile enough to allow for catching pips on this type of move.

As soon as H1 crosses the 80 I switch to M1 and look for an entry. The first red line is that point. This one is as good as it gets for a visual on the entry. On M1, the M5 and M15 stochastic are above the 80, and M1 falls to oversold and makes a sharp turn up. On the cross of the 20 enter long. It's a rubberband trade setup on M1 using M1, M5 and M15 stochs. This was was for 40 pips with no heat.

Total time in trade - 10 minutes.

There are 3 other tradeable pattern on this chart where the M15 spikes higher and then falls down with the other stochs and they are marked by the first 3 red lines. Switch to M1 during these moves and you'll see what I mean re using M1 for the entry.

Thanks to others who are sharing lower time frame setup information - it seems to be helping me develop an approach for entry to reduce (but not eliminate) the heat on volatile pairs.

Cheers,
CanuckCT
Jeff Singer, K2KV
  • #282
  • Nov 15, 2007 3:08am Nov 15, 2007 3:08am
Yesterday was a great day for shorts on GBP/JPY. Three set ups in my time zone.

One just after the London open which was a fake. Not a good start to the day. I entered just as the H1 crossed down below 76.4. The M15 and M30 were already on their merry way. Almost immediately the trade reversed and looking at the chart now it's sitting there with a little dip as though it never crossed in the first place (calling me a liar LOL).

This caused me to miss the next one completely, which was the best trade of the day. However, I took a great set up on the EUR/USD which seemed very slow and tame compared to the GBP/JPY

My triumph was in the afternoon when I scaled in GBP/JPY with sell stop orders at 5 pip intervals, small lots. I left them to run and it was good to stay in positive pips when retracements occurred, taking up more orders as the trade returned to the right direction. Made a mess of the screen, though.

Thank you k2kv for your post. I can definitely relate to that. Thank you also to moneda and marcin - wise words.

Today looks a bit trickier and I might stay out. Here is the euro trade I took, yesterday:
Attached Image
Gone to a better place
  • #283
  • Nov 15, 2007 3:20am Nov 15, 2007 3:20am
Looking like you are getting to grips with entries. I was impressed with the M5 M30 and H1 set up you posted and I now have that in my GBP/JPY profile as it isn't as jerky as the M1.

I also look at the MadroGoldenFilter. This is a digital read out of a bunch of indicators, ma cross over, force, rsi and what have you. None of them are stochastics. It's very laggy, especially on the higher time frames. It lags on the M1 and M5 too. You see the price change direction, watch it trace that direction for a few bars, then the madro kicks in with a "go" signal. LOL - my eyes could have done that but I like it anyway.
Gone to a better place
  • #284
  • Nov 15, 2007 3:59am Nov 15, 2007 3:59am
It is nice to hear you manage to trade 1,5 ,15 m.stoch.ruberbund.
Personaly I think it could be dangerous and I agree wit you that the best pairs for that are these which are enough volatile (GJ)but on the other hand these pairs have big spread.
I dont trade that way but when I have a good setup I always check the small time frames 1M and 5M to better tune my entries and I suggest everybody should watch 1 and 5M stoch when starting trade and when going out of a trade.
Thank you for nice charts .
  • #285
  • Edited 4:29am Nov 15, 2007 4:19am | Edited 4:29am
Quoting CanuckCT
I'd like to review 2 charts.

First the m15 chart shows a setup w spud MTF (I'm talking about the move up at the end of the chart). Have to be careful because the H4 is coming down, but in my opinion still very tradeable pattern because of the orderly way the M15, M30 and H1 come up from oversold and knowing that the pair is volitile enough to allow for catching pips on this type of move.

As soon as H1 crosses the 80 I switch to M1 and look for an entry. The first red line is that point. This one is as good as it gets for a visual on the entry. On M1, the M5 and M15 stochastic are above the 80, and M1 falls to oversold and makes a sharp turn up. On the cross of the 20 enter long. It's a rubberband trade setup on M1 using M1, M5 and M15 stochs. This was was for 40 pips with no heat.

Total time in trade - 10 minutes.

There are 3 other tradeable pattern on this chart where the M15 spikes higher and then falls down with the other stochs and they are marked by the first 3 red lines. Switch to M1 during these moves and you'll see what I mean re using M1 for the entry.

Thanks to others who are sharing lower time frame setup information - it seems to be helping me develop an approach for entry to reduce (but not eliminate) the heat on volatile pairs.

Cheers,
CanuckCT

Canuck,

That is beautiful!....nice going. Thanks for sharing. On my lower timeframes (1/5/15) I placed a 68.1 and a 38.2 and use those levels for confirmation/filters. I find that the 1min can be tricky so I prefer to see it cross those levels for my entries. I got this idea from Endroute (post#52) and made some changes to fit my style... thanks Endroute!


Oct 19, 2007 1:35pm
http://www.forexfactory.com/customav...tar50532_1.gifendroute
Pips for One Pips for All
Member Since Oct 2007
Posts: 30
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http://www.forexfactory.com/images/icons/icon1.gif Very short term trades using Stochs
Has anyone tried spuds scalping approach as follows. I started looking at this the other day and then got side tracked, and built a chart to start looking at it and all I have to say is WOW what a PIP machine on 5/15 and GBP/JPY even with the spreads.


MTF Scalp


Direction: You need not worry what direction the long term trend is in for this method to work, it works regardless of long term trend direction.


Time Frames: either: 5/15, 15/30, 30/1H, 1H/4H

Entry:

Set a level line on your 14,3,3 stochastic at 61.8 and 38.2.
Your entry/exit is always with the smaller time frame.

The smaller time frame should be one step (one candle) ahead of the longer time frame for the cross or one step behind...or exactly the same. This is optional if you are conservative and a common pattern. However, you do not want the longer time frame ahead more than one step of the shorter time frame.

On a long, whenever both tf's cross or are above 61.8, buy long.
On a short, whenever both tf's cross or are below 38.2 sell short.

You can add greater risk if the longer time frame is "near" the cross in the direction of your trade. The longer tf should be across 50 level. This may prolong your trade and could add some risk.

If you don't have this correlation of the 2 time frames, you don't have a trade. This is your filter mechanism.



Exits:


1. If the shorter time frame goes above 80 on a long or below 20 on a short, you definitely want to be out before it re-crosses 80/20.

2. If you nab some pips within 3 candles on the shorter time frame, you may want to exit.


3. If the longer time frame is looking like it will go above 80 on a long or below 20 on a short you may want to ride it out.



4. If the trend is with your trade you may want to stick it out...use a trand channel.
You will quickly notice an average pip gain, you may want to TP that.

You need not worry what direction the long term trend is in for this method to work, it works regardless of long term trend direction.
Unus pro omnibus, omnes pro uno
  • #286
  • Nov 15, 2007 4:46am Nov 15, 2007 4:46am
Hi Moneda
I tried thid method of scalping and this work but You wrote you use 14 3 3 setings for stochastic and I think Spud sugessted to use for scalping 5 3 3,I am just curious what you think about it......probably both settings works.
Thank you.
  • #287
  • Nov 15, 2007 5:08am Nov 15, 2007 5:08am
hey all , check out gbp/jpy , it might turn out to be the perfect setup for spuds escalator to pips , all 4 tfs are in oversold , with 15m crossing the 20 line , wat adds to this setup is the daily chart wher the line is jst crossing up the 20 level too , do check it out , might gives 100-200 pips ...
To Live is the rarest thing in the world , Most people exist , that is all
  • #288
  • Nov 15, 2007 5:17am Nov 15, 2007 5:17am
On my chart GJ the 4h is coming down but do not even reach 20 line and the other stoch. are below 20 pointing up.
  • #289
  • Nov 15, 2007 5:44am Nov 15, 2007 5:44am
Hello,


Going long on this set up. Not concerned too much about the 4hr. crossing the 76.4....(flat for the moment after its last closed candle at 5:00am est). There might be a bit of retracement but I will hang on for it bounce back up. We will see....
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Unus pro omnibus, omnes pro uno
  • #290
  • Nov 15, 2007 6:00am Nov 15, 2007 6:00am
Moneda,could you say why you enter ,I think it is too early entryand very dangerous.look at the 1h stoch,it not even touch 20 and the 4h pointing down,I hope you time your entry with 1 and 5M,good luck
  • #291
  • Nov 15, 2007 6:33am Nov 15, 2007 6:33am
Quoting marcin25
Moneda,could you say why you enter ,I think it is too early entryand very dangerous.look at the 1h stoch,it not even touch 20 and the 4h pointing down,I hope you time your entry with 1 and 5M,good luck
Marcin,

My reason were:

The 15/30 were out of the oversold area although barely so.

Price action had penetrated S1 level..which was acting as resistance....although not a completed 15min candle. It also broke through my trendline on the 15min chart

Daily range has reached and gone beyond the average for this pair.

My 1min and 5 min were above 61.8... I prefer between 38.2 and 50

So.......yes I agree that is a risky trade and I am down 40pips but as I mentioned in a previous post, I give my pair around 50+ pips breathing room... I just hope that I can breathe easier by the end of the day!

Is it not very revealing to put your trade before you know the result?

...just took a look and now I am down 25 pips....

Hope this helps in some way.
Unus pro omnibus, omnes pro uno
  • #292
  • Nov 15, 2007 6:59am Nov 15, 2007 6:59am
Moneda
Thank you ,now I know the way you thoughts and I can learn something from that.
I was considering to enter this setup as well but it was not good enough for me,be carefull ,I think the 15 m stoch wil go up a litille more and then cross 50 down and go down to join 30M and 1h stoch somewhere in area of 20 line,so I would get out of that trade,
Thank you.
  • #293
  • Nov 15, 2007 7:52am Nov 15, 2007 7:52am
I am going short EU
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  • #294
  • Nov 15, 2007 8:04am Nov 15, 2007 8:04am
Exit +4.4. I supposed to exit as I was +8,but I am ok with this quick and easy pips.
I exited when 15M touched 80 line( conservative exit)
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  • #295
  • Nov 15, 2007 8:05am Nov 15, 2007 8:05am
Quoting marcin25
I am going short EU
That drop caused at the news announcement. Might retrace? Could be dodgy.. Hope I'm wrong.
Gone to a better place
  • #296
  • Nov 15, 2007 8:10am Nov 15, 2007 8:10am
Going short GJ
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  • #297
  • Nov 15, 2007 8:14am Nov 15, 2007 8:14am
I am not sure about my GJ entry,dont like the 1H position,it is not bad but it would be perfect when pointing down
  • #298
  • Nov 15, 2007 8:21am Nov 15, 2007 8:21am
Smikester
What kind of annoucement you talking about,I cant see anny annoucement at this time
Thank you for warning
  • #299
  • Nov 15, 2007 8:30am Nov 15, 2007 8:30am
Exit GJ +10 but could wait a litilee more,but I am ok .I got +4.4 and + 10 in 30 minutes,nice and easy money .
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  • #300
  • Nov 15, 2007 9:32am Nov 15, 2007 9:32am
k2

change the price field in the stochastic settings from high/low to close/close

it shows a stochastic that is more in tune with where bars are closing

aside from good slopes on 20 and 50 stochs, look for slingshot trades and that is when the 20 and 50 are almost "decked" above 80 or below 20 and the 5 cross in their direction.
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