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The Art of Trading with MTF Stochastics

  • #761
  • Jan 7, 2008 9:08pm Jan 7, 2008 9:08pm
Quoting PipAV8tor
Basically, the only real method I have been using is waiting for the 5,3,3 to cross over 20 headed to 80 or 80 headed toward 20. That move from one to the other is usually 2 or maybe 3 of the 5 min candles. It can be 4 or 5 but it moves pretty quickly. It is a very quick trade, just looking for that 3-5 pips. I also have the 14,3,3 stoch there to confirm direction and help determine the exit. I do have the mac-d and rsi there as well, but they are very secondary and there pretty much to confirm volume. Almost all of the swings in either direction today were of the 20-30 pip variety with no re-trace surprises.
Since 5pm CST, there have been 7 very predictable moves and each was an easy 5-10 pip safe profit. I tried to post a screen shot but I am having difficulties.
Thanks for the details pip. Shall await ur pic attachment.
Out of curiosity, those trades you are talking about, were they in both directions? ie long and short, or just in one direction? I have found with scalping, that you increase your chances of a positive trade if you trade in the direction of the primary move, ie with a directional bias.

Really looking forward to discussing this further, as I have been trying to find something to increase the odds of taking 10 pips or so on a GJ 5M candle.

Regards,
K.
  • #762
  • Jan 8, 2008 11:12am Jan 8, 2008 11:12am
my trade for 10 pips on G/j,
daily stoch. well below 20 and flat
very guick money
Attached Image(s) (click to enlarge)
Click to Enlarge Name: gjenter.gif Size: 16 KB
Click to Enlarge Name: gj exit +8.1.gif Size: 20 KB
  • #763
  • Jan 8, 2008 12:28pm Jan 8, 2008 12:28pm
Quoting CanuckCT
Hey lotsofmoney,

Here it is. I've modified the original indicator to only color the OB and OS candles and not the candles bewteen 20 and 80. You set the stochastic value and see how it colors the candles. I find it useful to show you just how long price can stay OB and OS.

I've been studying what price does when the 14-3-3 stochastic is in OB and OS territory. The question I always have is what should I do when the stochastic crosses when in OB or OS territory. What I have found is that if the 14-3-3 stochastic crosses back while OB or OS and does not make it past the 80/20 line, that is a very good indiction that the move will continue on in OB and OS for further candles and is evidence that there is a retrace happening and not a reversal.

My 2 cents.

Cheers,
CanuckCT
thanks canuck
  • #764
  • Edited 2:06pm Jan 8, 2008 1:52pm | Edited 2:06pm
H4 under 80, M15 had crossed down and M30 and H1 were also down. Easy 20 pips with little heat.

Also price had moved below R1 and lots of room to pivot. I probably exited too early but once I have 20 pips I'm grabbing it unless I can pay full attention to the trade. This one taken while at work.

Cheers,
CanuckCT
Attached Image
  • #765
  • Jan 8, 2008 2:36pm Jan 8, 2008 2:36pm
Hi Canuck,

Nice trading, as usual!

But I'm not sure exactly where you entered (I apologize if it's obvious).

Also, do you feel that the H4 below 80 is pretty much the same as if it's below 20?

Thanks!


Quoting CanuckCT
H4 under 80, M15 had crossed down and M30 and H1 were also down. Easy 20 pips with little heat.

Also price had moved below R1 and lots of room to pivot. I probably exited too early but once I have 20 pips I'm grabbing it unless I can pay full attention to the trade. This one taken while at work.

Cheers,
CanuckCT
Jeff Singer, K2KV
  • #766
  • Edited 3:21pm Jan 8, 2008 3:05pm | Edited 3:21pm
KV,

H4 stochastic had made a turn - u can see it better on the H4 timeframe, although it was not as pronounced as it is now. It's the same as having H4 oversold. H4 trend is down and it's a high percentage trade on M15. Just wish I had followed it to the pivot.

BTW, is there any interest in continuing the trading room. I never see anyone there.

Cheers,
CanuckCT

After I posted this entered short again based on H4 stoch...short at 214.80 and closed for +10.

Quoting k2kv
Hi Canuck,

Nice trading, as usual!

But I'm not sure exactly where you entered (I apologize if it's obvious).

Also, do you feel that the H4 below 80 is pretty much the same as if it's below 20?

Thanks!
Attached Image
  • #767
  • Jan 8, 2008 3:14pm Jan 8, 2008 3:14pm
If you want a better view, email me and I will send it to you. These moves are from today, approx 10 am EST to 4 pm EST on the 5 min chart.

Attached Image (click to enlarge)
Click to Enlarge Name: 4 moves.jpg Size: 151 KB


sorry, it looks huge on my screen.
  • #768
  • Jan 8, 2008 3:38pm Jan 8, 2008 3:38pm
Canuck,

Thanks for the explanation and nice chart!

Regarding the trading room --

I do check in at least once a day, but have not found anyone there as yet, nor has anyone shown up after at least an hour of my entry, since the holidays.

I think it's a great idea, but I believe the entrance may just be a little too imposing for the majority (i.e., downloading and installing the software). The half-dozen or so of us who do check in can't seem to get there together, so it seems like a bust for now. Frankly, it would be easier to just go back to IM like we used to. However...

I have another idea. There are quite a few folks who regularly frequent this thread, so the easiest thing would be for me to just open the gates, and invite everyone to join in right here, whenever they are in the trading mood, not just to discuss "the Art..."

I think I'll post a notice to that effect, and see if we can get a nice, busy trading room going here -- related, of course, to MTF Stochastic trading. Wouldn't really be much different, and all subscribers would be alerted to new posts.

I could sure use a sounding board or two, since I still manage to get killed on occasion (see my next post).

What do ya think?



Quoting CanuckCT
KV,

H4 stochastic had made a turn - u can see it better on the H4 timeframe, although it was not as pronounced as it is now. It's the same as having H4 oversold. H4 trend is down and it's a high percentage trade on M15. Just wish I had followed it to the pivot.

BTW, is there any interest in continuing the trading room. I never see anyone there.

Cheers,
CanuckCT

After I posted this entered short again based on H4 stoch...short at 214.80 and closed for +10.
Jeff Singer, K2KV
  • #769
  • Jan 8, 2008 3:56pm Jan 8, 2008 3:56pm
Canuck,
Hind sight is 20/20 of course, but that was/is a beautiful setup for the escalator. As I type this, H4 stoch is nearing 20 and price has been as low as 214. Finding those rare big moves with near perfect setups is hard and sometimes you just got to let it run a little. Very nice trade!!
  • #770
  • Edited 4:19pm Jan 8, 2008 4:04pm | Edited 4:19pm
Hi Pip,

Thanks for posting your chart. Don't know why it's so small, but it's not a problem.

I must warn you that these charts can be quite deceiving, especially on GBPJPY. Within any 50 pip move south, there are numerous surges north, and vice-versa. It can be frightening to take a trade and watch it go against you, yet this fear is rarely reflected in the charts that follow. For example, I took what I thought was a good trade this morning, just about 10:00 Eastern...

It was a short (sell) trade in a nice trend based on a chart setup that I've used to success in the past. However, the moment I entered, it was as if I had ignited a rocket to the moon, and the thing just took off against me at break-neck speed, with hardly a retrace. I got out -58 pips, killing my week (and my confidence), and watched it continue to rise until it had reached -75 from my entry.

Right now, had I remained in the trade, I'd be +120 pips, according to the chart. Frustrating, for sure, and too easy to see how I could have done so well, after the fact. But, the reality is, if I break the chart up into very little pieces for close post-trade scrutiny, it is unlikely that I would have remained in the trade for the duration. Too many retraces along the way. Lots of noise spikes on this pair, more than any other I am aware of. Very appealing for traders looking for 20 or more per trade.

You are correct in that there are some rather substantial moves to either side where it should be easy to pick up a simple 5 pip gain. But, the average spread on this pair is at least that much, so in reality you have to plan on gaining 5 pips plus the spread, just to net 5. And, in that process, if it goes just 5 against you (which it can do in a blink), you're already down 10 pips. Seems a difficult pair to play for such small desires.

In my mind, going to GBPJPY for 3-5 pip gains is akin to taking a 60-foot fishing vessel out into the middle of the Atlantic, looking for minnows. Waters too choppy, costs too high and just too much risk. Now, if you were looking for sharks, that would be another story.

If I were looking for 3-5 pip trades, I would look at other -- less heart-stopping -- pairs like EURUSD or AUDUSD which both have much tighter spreads and will treat you better in the short term with their relatively docile price action, by comparison.

Just my opinion, of course. You might play on demo for a week or so, to get the feel, and see if it works for you...


Quoting PipAV8tor
If you want a better view, email me and I will send it to you. These moves are from today, approx 10 am EST to 4 pm EST on the 5 min chart.

Attachment

sorry, it looks huge on my screen.
Jeff Singer, K2KV
  • #771
  • Jan 8, 2008 4:17pm Jan 8, 2008 4:17pm
Jeff,
There is definitely volatility, but that 20 to 80 and back to 20 move is almost as regular as big Ben. It is working very well in Demo mode, but I haven't done it live yet. The channeling environment we are in right now has me somewhat concerned. That is why I threw the idea out there, to get feedback, so thanks. I am gonna continue to look at it. Just in the 4 moves today, there were a lot of pretty safe pips and there is no doubt that these trades are the quick in/out type, not the let er run type.
  • #772
  • Jan 8, 2008 4:52pm Jan 8, 2008 4:52pm
Pip,

You're right - it does swing back and forth all day long. I know, I frequently trade the 5.3.3 on the M5 chart (looking for bigger gains).

But, take a look at this action. I took the swing down, just after the 5.3.3 had crossed below 80. It might have given me 5, if I recall correctly. But then, it got snapped away like lightning and moved up another 80 pips. My original stop was 5 more above that but, because of the velocity of the move I decided to get out at -58 (bad move in retrospect, because it never did hit my SL. Ahhh -- retrospect ).

That little retrace back up of the 5.3.3 represents a full 80 pip swing. So, while the stoch swings back and forth like clockwork, please keep your eye on all the "noise" that occurs along with it.

Now, having said all that, it is entirely possible that trading for just 5 pips and getting the heck out of the battlefiled may actually be the much safer/smarter way to trade this pair. I've had lots of trades go +5 before going -40, so you may be on to something, and I won't ever close my mind to a better idea...

I'd like to see you post some of your demo trades, to see exactly where you're entering and exiting. I happen to be a personal fan of quick in/out trading

Thanks much!


Quoting PipAV8tor
Jeff,
There is definitely volatility, but that 20 to 80 and back to 20 move is almost as regular as big Ben. It is working very well in Demo mode, but I haven't done it live yet. The channeling environment we are in right now has me somewhat concerned. That is why I threw the idea out there, to get feedback, so thanks. I am gonna continue to look at it. Just in the 4 moves today, there were a lot of pretty safe pips and there is no doubt that these trades are the quick in/out type, not the let er run type.
Attached Image
Jeff Singer, K2KV
  • #773
  • Jan 8, 2008 5:13pm Jan 8, 2008 5:13pm
Hi jeff ,

just getting the hang of the stochs now, still cant load them properly on my MT4 for some reason , but ive got enough to get me by, I,m only a beginner,Ive dabbled for a year or two but ive done mind boggling research and trials with numerous indicators and methods on this site, and have settled with imran,s lag,s for main trades using m5 which im quite happy with, like you say nail biting moves against you at times with gbp/jpy,especially as im trading live, how come the pips always go a lot quicker against you than for you!!
however ive come to the conclusion you cant beat stochs and now what i do is flick from m5 to m1 as im in the trend, following the stochs, and on m1 you can then follow the pullback movement, and sometimes trade them aswell, this also gives v good entry for re entering trend with minimal drawdowns, this way i find you can avoid being alarmed by the pip movement,
thanks to you and the loyal band of followers for your posts, hope my bit helps, Francis
  • #774
  • Jan 8, 2008 5:20pm Jan 8, 2008 5:20pm
Jeff,
I can't seem to find that action on my chart. It is from today at 14:45 right? That is within the same time frame as the chart I posted and I don't see that jump. See if you can look at my post and match up that pattern. For reference, where I typed in "140 pip move" is right at the 14:45 time.
Also, I believe in the tight stop on this pair, 10 pips + spread above or below my entry price. I can make up for a 10 pip loss fairly easily, but 40 or 50 really puts "pressure" on yourself to get it all back right away. Kind of a mind game, I guess.

I think I found the move at about 12:45 on my chart. If that is right, then I am kind of curious why you went with a sell. If I have the time right, everything was setting up for a buy and was actually trade 3 that I posted on my chart. I may be wrong on that...
  • #775
  • Jan 8, 2008 5:38pm Jan 8, 2008 5:38pm
Hi All,

As many of you know, a number of us have been getting together from time to time in a separate trading room. It's been great, and we've learned a few things in the process. Unfortunately, most stayed away, and I suspect the main reason is the extra steps involved with downloading, installing and setting up the software.

So, I'd like to invite EVERYONE who feels like trading, to simply use this forum as a trading room!

HOW:

1. If you see a setup that interests you, post it here for discussion.

2. If you've already entered a trade, tell us what pair, what price you entered, why you took the trade and other details like SL & TP targets.

3. We're trading MTF Stochastics here. We're learning and sharing, banging ideas off one another, in an effort to refine our art. And, it is an art!

4. Make sure you're subscribed to this thread, so that you will be notified soon after anyone posts a new message.

5. As always, feel free to post your charts (we all love to see them), whether prior to a trade, in a trade or afterward, for discussion or simply to share your winners and losers. If you need help getting your charts posted, please ask and I'm certain you will receive immediate assistance from our friendly members.

6. Ask questions if you don't understand something. We are here to learn, and everyone's questions are important. We are extremely lucky to have the participation of a truly generous group of traders of all levels -- from novice to professional -- who are always willing offer help whenever they can.

7. Newbies: Don't be shy. Forex isn't easy. This is a friendly room, and we all want to see you do well.

Thanks!
Jeff Singer, K2KV
  • #776
  • Jan 8, 2008 6:10pm Jan 8, 2008 6:10pm
http://www.forexfactory.com/showpost...98&postcount=5
  • #777
  • Jan 8, 2008 6:18pm Jan 8, 2008 6:18pm
Quoting tim4kaye
http://www.forexfactory.com/showpost...98&postcount=5
A MUST read!!

I sure wish he would come back... It has taken me months to realize what he meant when he wrote that, but I get it now and it is true. We tend to over think and over analyze and it really can be as simple as watching the 5,3,3 stoch bounce between the 20 and 80 on the 5 min chart.

Also, for Jeff
But, take a look at this action. I took the swing down, just after the 5.3.3 had crossed below 80. It might have given me 5, if I recall correctly. But then, it got snapped away like lightning and moved up another 80 pips. My original stop was 5 more above that but, because of the velocity of the move I decided to get out at -58 (bad move in retrospect, because it never did hit my SL. Ahhh -- retrospect ).
There was an announcement, US consumer Credit at 3 EST that could have caused your "bump". It was much better than expected so it could have had an effect.
  • #778
  • Jan 8, 2008 6:24pm Jan 8, 2008 6:24pm
Hi Francis,

Never thought about trading M1 on GBPJPY; I'll take a look next session.

Oh wait -- I can't. For some reason, whenever I go to M1 on my MT4 platform, the whole program hangs up. Weird, huh?

So much for that idea

I've also looked over many different ideas and systems, but I always come back to MTF Stochastics. Just makes for sensible trading. It's all the nuance that makes it a study.

Quoting francis2
Hi jeff ,

just getting the hang of the stochs now, still cant load them properly on my MT4 for some reason , but ive got enough to get me by, I,m only a beginner,Ive dabbled for a year or two but ive done mind boggling research and trials with numerous indicators and methods on this site, and have settled with imran,s lag,s for main trades using m5 which im quite happy with, like you say nail biting moves against you at times with gbp/jpy,especially as im trading live, how come the pips always go a lot quicker against you than for you!!
however ive come to the conclusion you cant beat stochs and now what i do is flick from m5 to m1 as im in the trend, following the stochs, and on m1 you can then follow the pullback movement, and sometimes trade them aswell, this also gives v good entry for re entering trend with minimal drawdowns, this way i find you can avoid being alarmed by the pip movement,
thanks to you and the loyal band of followers for your posts, hope my bit helps, Francis
Jeff Singer, K2KV
  • #779
  • Jan 8, 2008 6:41pm Jan 8, 2008 6:41pm
Hey Pip,

You know, my setup is probably different than yours. Different from most, in fact. I have my stochs on that chart set to close/close instead of hi/lo, and that probably accounts for our difference. I get a bit more "action" than you, but I'm not sure if this is a good thing or bad

I think I will return to basics tomorrow, since most people are using the hi/lo settings. No doubt, over time some of my settings have strayed a bit from the originals; not sure if this hurts or helps me, but I will surely be better served by keeping my settings the same as everyone else, and staying on the same page!

According to my notes, I traded against a rubberband setup with a high H4, since I had concurrence of a downtrending 25-10-20 stoch on several time frames. I was sure the long move was over (oh yeah). During the trade I sensed I had made an error, and realized I should have stayed with the rubberband -- which turned out to be perfect and would have yielded an easy 75 pips!

Sometimes I get a little screwy with my trading, but I'm learning every day.

Quoting PipAV8tor
Jeff,
I can't seem to find that action on my chart. It is from today at 14:45 right? That is within the same time frame as the chart I posted and I don't see that jump. See if you can look at my post and match up that pattern. For reference, where I typed in "140 pip move" is right at the 14:45 time.
Also, I believe in the tight stop on this pair, 10 pips + spread above or below my entry price. I can make up for a 10 pip loss fairly easily, but 40 or 50 really puts "pressure" on yourself to get it all back right away. Kind of a mind game, I guess.

I think I found the move at about 12:45 on my chart. If that is right, then I am kind of curious why you went with a sell. If I have the time right, everything was setting up for a buy and was actually trade 3 that I posted on my chart. I may be wrong on that...
Jeff Singer, K2KV
  • #780
  • Jan 8, 2008 6:42pm Jan 8, 2008 6:42pm
Thanks Tim,

Very timely, always good to go back and re-read the master. I do it all the time.

Thanks for the post!



Quoting tim4kaye
http://www.forexfactory.com/showpost...98&postcount=5
Jeff Singer, K2KV
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