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The Art of Trading with MTF Stochastics

  • #681
  • Dec 27, 2007 9:45am Dec 27, 2007 9:45am
that is my today trade for 10 pips.
I was trading 1H/30/15M being below 80 and nicely pointing down.
4h was above 80 but it gave direction confirmation.
quick and no heat trade.
When trading only 1H/30/15M I try to not to trade against daily stochastic.
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  • #682
  • Dec 27, 2007 1:39pm Dec 27, 2007 1:39pm
Nice trade Marcin, do you wait for the stochastics to close below 80 before taking a short trade? It looks like on your chart the 15 and 30 had, but not the 1 hour.
  • #683
  • Dec 27, 2007 1:55pm Dec 27, 2007 1:55pm
Yes Ocelot,the stochastic have to be closed below 80 line.
If you take a closer look at first chart you will see the 1H stoch has crossed 80 line and was closed at the moment of entry
  • #684
  • Dec 27, 2007 3:08pm Dec 27, 2007 3:08pm
Quote
RialtoGlenn,

Thanks for sharing your chart. Please feel free to discuss your method - we are still in the realm of MTF Stochastics. I'm a big fan of Spud's Thread Theory and anything that might enhance its success would be welcomed.

as you see by the two charts, the trade is confirned as the stoch becomes solid and it pass'es the 76.4% level, I only trade when the blue stoch's are on the left ( both long and short).
I find using the fib levels to be a good filter.

Glenn
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  • #685
  • Dec 27, 2007 8:20pm Dec 27, 2007 8:20pm
Quoting marcin25
Yes Ocelot,the stochastic have to be closed below 80 line.
If you take a closer look at first chart you will see the 1H stoch has crossed 80 line and was closed at the moment of entry
Ah, so it is. I see it now. So do you ignore the 4h stoch then and just trade the 15, 30 and 1 hour? Are you following spud's original rules and riding the stochs down to the 20 or are you going for a set number of pips? And if you don't mind one more question, what are you setting your stop loss at? I've just been using recent areas of support of resistance for my stops, but it often creates a bad risk:reward ratio, something I don't particularly like doing but can work out if you have more winners than losers. Thanks for answering my questions!
  • #686
  • Dec 28, 2007 8:36am Dec 28, 2007 8:36am
my today trade for 11 pips.
Again it was 1H /30/15M agreement trade with 4H above 80 giving direction confirmation(it was pointing down)
the move is now over 5o pips and the 4H lefft ovrbought area.
what is more what I payed attention at the moment of entry was daily stochs.It was below 20 line.
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  • #687
  • Dec 28, 2007 11:22am Dec 28, 2007 11:22am
Hi Ocelot,

Thanks for joining us!

No, I don't usually wait for longer TF candles to close, as that would severely limit my ability to trade at the most opportune moments.

I much prefer to trade on price action when the stochs are indicating agreement. Forex moves so fast, that waiting for longer TF candles to close is - for me - like waiting for my train to pass before I get on. And, I don't backtest, so that's not really an issue for me.

In the main, I'd say this group generally follows the original rules, but once in awhile we might stumble across some variation that seems to be working for us, so we'll share it.

Regarding the H4, it is very slow to come around to the direction of the other stochs. After all, it takes four H1 periods or sixteen M15 periods to cause a significant change in its direction. H4 follows the others, and is a good indication of the longer trend, but the more experienced MTFS traders may have a better eye for what is happening overall, and may choose to ignore the H4 if they feel a strong move has been indicated by the other stochs. Spud's "away" trade is a good example of trading against the H4 stoch. And, despite my own reluctance to trade against the trend, I've seen that type of trade end in profit over and over again.

Good trading!


Quoting ocelot
I've been following this forum for a while and have been trading the "elevator" system of Spud's for the last few months with varying degrees of success. I'm glad you guys are still using the system and posting your trades - it's very helpful. k2kv, I notice you're using that all-in-one stoch indicator, do you wait for the candles to close on the higher timeframes before entering trades? I recently switched to that indicator (as opposed to having four separate charts open) as it's made both backtesting and trading multiple pairs a lot easier. Unfortunately though you can't easily backtest setups where the 1 and 4 hour candles haven't closed yet which is the situation you're going to come across in live trading. Have you guys deviated from the original rules at all? For example, I read one person on the original thread ignores the 4-hour completely.

I live on the west coast and work during the day so I can usually trade most of the asian session (though I usually miss the first hour or two) and the beginning of the london session. I'll try to post some setups and trades from these sessions if you guys would like.
Jeff Singer, K2KV
  • #688
  • Dec 28, 2007 11:33am Dec 28, 2007 11:33am
Hi Rialto,

Can you please tell me to which posting you are referring? I can't seem to locate any post from Glenn that is previous to yours.

Thanks!



Quoting Rialto
Glenn,

Thanks for sharing your chart. Please feel free to discuss your method - we are still in the realm of MTF Stochastics. I'm a big fan of Spud's Thread Theory and anything that might enhance its success would be welcomed.
Jeff Singer, K2KV
  • #689
  • Dec 28, 2007 11:35am Dec 28, 2007 11:35am
nice explanation Jeff
I only add what Spud sugested to do:
if you trade only 1H/30/15M do not trade against daily stochastic and if 4H is between 20/80 do not trade against 4H.
It is simple so if you want consistent profit follow this rules.
Have a nice weekend.
  • #690
  • Dec 28, 2007 11:37am Dec 28, 2007 11:37am
Hi Marcin,

You continue to trade so well!

I've decided to stay out of the game until after the New Year, since volume seems light and somewhat erratic. No doubt, I can use the break.

Keep up the good work!


Quoting marcin25
my today trade for 11 pips.
Again it was 1H /30/15M agreement trade with 4H above 80 giving direction confirmation(it was pointing down)
the move is now over 5o pips and the 4H lefft ovrbought area.
what is more what I payed attention at the moment of entry was daily stochs.It was below 20 line.
Jeff Singer, K2KV
  • #691
  • Dec 28, 2007 11:50am Dec 28, 2007 11:50am
Hi Marcin,

Yes, some very good pointers.

I always watch the daily/longterm trend and will rarely trade against it (in a trending market), no matter how strong the stochastics may be indicating a trade in the opposite direction. Why subject myself to greater risk?

Take care, have a safe and happy New Year...


Quoting marcin25
nice explanation Jeff
I only add what Spud sugested to do:
if you trade only 1H/30/15M do not trade against daily stochastic and if 4H is between 20/80 do not trade against 4H.
It is simple so if you want consistent profit follow this rules.
Have a nice weekend.
Jeff Singer, K2KV
  • #692
  • Dec 28, 2007 2:43pm Dec 28, 2007 2:43pm
Jeff,

It's funny you ask. I searched last night and couldn't find a trace of Glenn's original post with chart. Strange, maybe it was deleted for some reason. I hope that he posts again on your thread because I'd like to know his take on Spud's Thread theory. Have a Happy and Prosperous New Year.
  • #693
  • Dec 28, 2007 2:57pm Dec 28, 2007 2:57pm
heres some serious mtf stoch trading

1h chart

4h stoch 21 10 10 and 5/3/3

21 dropping big time
the 5 is under 20

= downtrend

the lowest window

1h 21 10 10 and 5/3/3

21 under 20
5 pulled back
i entered at the red line

too bad i got out at 50 pips though

but yep thats how i trade

any questions feel free guys
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  • #694
  • Dec 28, 2007 3:21pm Dec 28, 2007 3:21pm
I have reposted my chart's....

I did delete the first ones as I was concerened that my method was not in keeping with the thread.

I have been trading the MFT shoch indicator for many years along with MA crosses and channel's/bands.

Every now again I update or reread some of the many books etc I have , as you are aware stoch and ma crosses have been traded for many years and people just refine or change things to suite themselves.

The setup I have posted makes many postive pips a week, and I find it almost idiot proof ( thats why I trade it).....I only use it on 1hr tf's.....all other trades are done with Elliot waves on a longer TF..

Glenn
  • #695
  • Dec 28, 2007 4:49pm Dec 28, 2007 4:49pm
Hi Glenn,

Thanks for posting your charts and setups.

I wonder if you would be so kind as to elaborate on exactly what it is you're doing here. Looks pretty complicated to me, and I'm sure I'm not the only one here who would love to learn a new, "idiot proof" method, as long as it involves the application of MTF Stochastics.

Perhaps if you posted your rules and explained what constitutes a good setup and entry signal, it might be easier for us to become involved.

Thanks so much!


Quoting glenn5t
I have reposted my chart's....

I did delete the first ones as I was concerened that my method was not in keeping with the thread.

I have been trading the MFT shoch indicator for many years along with MA crosses and channel's/bands.

Every now again I update or reread some of the many books etc I have , as you are aware stoch and ma crosses have been traded for many years and people just refine or change things to suite themselves.

The setup I have posted makes many postive pips a week, and I find it almost idiot proof ( thats why I trade it).....I only use it on 1hr tf's.....all other trades are done with Elliot waves on a longer TF..

Glenn
Jeff Singer, K2KV
  • #696
  • Dec 28, 2007 4:59pm Dec 28, 2007 4:59pm
Hi Boxing,

Long time, no hear -- I was getting worried about you!

I see you've developed a new setup. Looks very interesting. I just want to clarify for those unfamiliar with your methods: Each stoch mentioned also includes the signal line, something we don't usually use with Spud's methods. So, for example, the H4 is the thick cyan line, and the gold is the signal line. Correct me if I am wrong.

Would you use this setup only on the H1 chart?

Thanks!

Quoting boxingislife
heres some serious mtf stoch trading

1h chart

4h stoch 21 10 10 and 5/3/3

21 dropping big time
the 5 is under 20

= downtrend

the lowest window

1h 21 10 10 and 5/3/3

21 under 20
5 pulled back
i entered at the red line

too bad i got out at 50 pips though

but yep thats how i trade

any questions feel free guys
Jeff Singer, K2KV
  • #697
  • Dec 28, 2007 5:19pm Dec 28, 2007 5:19pm
Inserted Code
 k2kvHi Glenn,

Thanks for posting your charts and setups. 

I wonder if you would be so kind as to elaborate on exactly what it is you're doing here. Looks pretty complicated to me, and I'm sure I'm not the only one here who would love to learn a new, "idiot proof" method, as long as it involves the application of MTF Stochastics.

Perhaps if you posted your rules and explained what constitutes a good setup and entry signal, it might be easier for us to become involved.

Thanks so much!
hi.

To me my method is very simple, I find it intresting you say its complicated.
If you refer to my post 684 you will see I show the entry points with the MA cross to confirm...as far as a setup goes we look for the pair to turn at the top of the stoch range again confirmed by the bands and when it pases the fib level as showen on the chart thats the entry...of course a long move is reverse.
As I have said I have been trading for many years and I belive I have refind it to a stage now where it gives very good returns....

Glenn
  • #698
  • Dec 28, 2007 10:29pm Dec 28, 2007 10:29pm
I haven't posted in a while but would like to share what I'm currently doing to perhaps generate some discussion. Last night took 2 trades during the asian session...the blue section on my H1 chart. The first trade was a couple of hours into the asian session...the H4 and daily charts were forming a bearish pattern...H4 5-3-3 stoch clearly moving down and there was a hint that the 5-3-3 on the daily might start to crossover.

On the H1 chart, the M30 stoch (blue) went above 80 and turned back down but H4 and H1 did not follow up, and the sexy stoch setup was a good sell setup. Sold at 226.69 and target was S1 or 226.25. Exited for +36 with no heat and thought I might be done for the day. Looked quite bearish so I waited.

A bit later hourly bar closed below S1 and I entered a second short trade at 225.90 (waited for price to go below 226) with target of S2 of 225.42, set the target and stop just above S1 and went to sleep. On this entry stochs were close to oversold or already oversold, but because I'm focusing on higher timeframes, I'm not so worried about what price will do when it hits 80 or 20 on the stoch and more focused on S&R and pivots for exits. This trade Closed at 225.42 while I was sleeping.

Today would have been another easy short from S2 to S3 but did not trade during the day. Here is what I would have done based on my current strategy...looking at H1 chart - hourly bar closed below S1...looking for price to move below 225 ...target would have been 224.33 for very little heat and + 50 to +70 move.

I'm currently focusing on GJ, looking at closed H1 bars for confirmation of direction of trade (sometimes M30), H4 and daily for trend and M5 to time the entry for minimum heat. Stochastics on each with a lot of focus on 5-3-3 on daily, H4 and H1 (you might refer to TEB2 system that uses 5-3-3 and multiple time frames), and I'm using spud without the M15 stoch and finally a view of spud's stochastics theads. I'll probably remove threads from M5 as not using it there. It's a combination of different stoch systems to give me view of bigger picture and less focus on faster moving M5 and M15 timeframes.

And I have this snake force thing that I quite honestly don't know what it measures...but is does help me pull the trigger.

The other thing I've been working with is stochastic momentum indicator, but it's not on these charts. It works like stochastic, but a bit smoother.

My trade target is 30 to 50 pips per trade and I'm thinking there are a couple of times per session where this is possible with GJ.

Cheers,
CanuckCT
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  • #699
  • Dec 29, 2007 1:32am Dec 29, 2007 1:32am
Hi everyone,

I thought I'd toss my hat in and post my latest trades. I was watching the chart waiting for an MTF setup when I saw a cluster of doji candles form (just a few candles to the left of the red vertical line) these came at the end of a down trend so I entered a long trade on the close of the first bullish candle. This was a great trade and I took 48 pips profit. My stop loss was below the recent lows and my profit target was the nearest 'double zero' level, 226.00. I don't consider this a proper MTF trade per se because the hourly candle stoch hadn't closed above 20 yet.

Which brings me to my next trade --

As soon as the hourly stoch *did* close above the 20 I took another long trade, this is right on the red vertical line. I don't consider this a good trade because by then the 15 min stoch had started turning down. I took the trade anyway and set a profit target of just 10 pips with a pretty tight stop (below the low of the candle immediately prior to the red line). Too tight in this case as I got stopped out on the next candle, the profit target was eventually hit though.

After reading Jeff's reply to my last post I'm going to be a little more loose in terms of waiting for candles to close and incorporate more price action into my decisions. It really is more art then science and with a system like this I think it helps to think of it more as a framework that is flexible than a set of hard rules.

More trades as I take them!
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  • #700
  • Dec 29, 2007 3:43am Dec 29, 2007 3:43am
hey k2
this isnt a new method
this is how i trade most of the time. the only thing i did is merge the 1h and 4h into 1 chart

im always trading mtf and for the past year i have not taken any trade unless i checked a higher timeframe with it

anyways ill post more later but i wanted to show u how during a trendy 4h stoch, even if u dont have a signal there and just direction, u can alway go down to 1h and trade the pullbacks there.
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