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The Art of Trading with MTF Stochastics

  • #801
  • Jan 9, 2008 4:43pm Jan 9, 2008 4:43pm
Quoting PipAV8tor
Canuck,

The default setting for Mac-d on my platform is 12,26,9 and I think that is very good for the 15 and larger time frames. For the 5 min, the 12,20,9 works well, as it reflects more recent history. Other smaller numbers may work, but I try to use mac-d to find divergence, so you want a sampling of many recent candles. The stoch will and should initially be somewhat opposite of mac-d when you first think of entering. The mac-d used in conjunction with the stoch helps to find duration of a move and shows when momentum is with you or changing. The stoch is definitely the lead indicator and can be used all by itself (IMHO) for trading on the 5 min chart. However, if you read the post from The LFB, during trending markets, when the stoch tends to stay ob/s for longer periods of time, it loses some amount of accuracy and that is where the mac-d really becomes valuable for duration. I think trading the 5 min is still risky and the s/l should remain tight, but as you noted and as Spud pointed out, there are literally a hundred opportunities a day. To get 10-20 pips a day seems almost too easy. I plan to keep doing the demo trading with it this week, but I plan to use it in my live account next week, unless I find a flaw.

Update as of 2 pm est.
2 trades today, using the 5 min chart and 5,3,3 stoch. +36 pips and +18 pips. both as sell.

Nice trades today PIP and all you are using is the 5.3.3 stoch? Are you looking at the upper time frames for direction?

T4K
  • #802
  • Jan 9, 2008 8:55pm Jan 9, 2008 8:55pm
T4K,

The only thing that I am doing is making sure that I don't go against the 15m chart, so no sell if the stoch on the 15m is moving up from 20 etc.... The 15 min is channeling also, just not as quiclkly as the 5 min moves, obviously. I did 2 more trades later in the day for +6 and +9. Each trade today, I was into profit almost immediately and out very quickly, 10-15 mins. I am still kind of baffled by how simple it seems. :
  • #803
  • Jan 9, 2008 9:00pm Jan 9, 2008 9:00pm
This is the Euro....present chart....I have not taken the trade as I am concerned about the volume and the other points I raise in the pic...

The point of me posting this is to show when i would not enter..

Glenn
Attached Image (click to enlarge)
Click to Enlarge Name: eu.gif Size: 31 KB
  • #804
  • Edited 10:12pm Jan 9, 2008 9:29pm | Edited 10:12pm
Quoting PipAV8tor
T4K,

The only thing that I am doing is making sure that I don't go against the 15m chart, so no sell if the stoch on the 15m is moving up from 20 etc.... The 15 min is channeling also, just not as quiclkly as the 5 min moves, obviously. I did 2 more trades later in the day for +6 and +9. Each trade today, I was into profit almost immediately and out very quickly, 10-15 mins. I am still kind of baffled by how simple it seems. :
I understand what you mean about the simplicity factor. My thoughts have always been if something in this business isn't difficult it can't work. Maybe we have been making it too hard all along. Time will tell!

T4K
  • #805
  • Jan 9, 2008 10:17pm Jan 9, 2008 10:17pm
I'll try and post some charts tomorrow. I seem to have trouble getting them to look good on here. They look great when I upload them. Not sure what I am doing wrong. They are full pages on my computer but post as post-it notes in the forum... Good thing I know how to trade and don't have to make my living on here.
  • #806
  • Jan 10, 2008 4:16am Jan 10, 2008 4:16am
Quoting PipAV8tor
I'll try and post some charts tomorrow. I seem to have trouble getting them to look good on here. They look great when I upload them. Not sure what I am doing wrong. They are full pages on my computer but post as post-it notes in the forum... Good thing I know how to trade and don't have to make my living on here.
Hello Pip,

Nice to see you back. This is what I do to capture charts with MT4:

Select >>>>SAVE AS PICTURE>>>under the File Tab

Select >>>>>> ACTIVE CHART (AS IS) >>>>> in the window

Pick a place in your harddrive to save into.

The rest you already know....

Hope this helps
Unus pro omnibus, omnes pro uno
  • #807
  • Edited 8:39am Jan 10, 2008 7:58am | Edited 8:39am
Short entry on GJ as follows:

5-3-5 stoch had crossed down. It didn't make it all the way to overbought but after the cross went below 50. As confirmation for the entry I referred to macd and momentum and both were showing a sell. Short at 215.35. Stop is 5sma using close + 15.

I've added the absolute strength indicator Glenn used. Had tinkered with that before but never really knew what to do with it. It and macd are for confirmation only, stoch is for entry. So I guess it's still ok to post it here. But I'm wondering Jeff if I'm straying from using MTF stochastics a little to far here. I'm also including the H1 chart which also shows the current trend on H1 is down. Will jump to higher timeframe if bigger trend develops but still experimenting with how to do that.

Two things that concerned me about the trade..pivot was 215.19 and the round number 215.

I adjust my stop at 5 minute intervals. Currently +100.

Cheers,
CanuckCT

EDIT - stopped for +95
Attached Images
  • #808
  • Jan 10, 2008 8:15am Jan 10, 2008 8:15am
Hi Canuck,

Great trading!

I like your new approach, and I think it's exciting that in the last few days we're seeing lots of fresh ideas.

I have no problem with your indicators. We all use 'em to one degree or another and even though we are trading MTF Stochastics, there's nothing wrong with a little confirmation. My only comment is that I don't think you really need more than one or two indicators if you're trading MTF Stochastics, since the concept is to simplify things, not complicate them.

So, you're still trading MTFS. I'll only complain when the topic turns to requests for EA's and indicator mods, or when your methods no longer have much to do with MTFS.

THanks for your charts. Hope to see some rules soon!

Quoting CanuckCT
Short entry on GJ as follows:

5-3-5 stoch had crossed down. It didn't make it all the way to overbought but after the cross went below 50. As confirmation for the entry I referred to macd and momentum and both were showing a sell. Short at 215.35. Stop is 5sma using close + 15.

I've added the absolute strength indicator Glenn used. Had tinkered with that before but never really knew what to do with it. It and macd are for confirmation only, stoch is for entry. So I guess it's still ok to post it here. But I'm wondering Jeff if I'm straying from using MTF stochastics a little to far here. I'm also including the H1 chart which also shows the current trend on H1 is down. Will jump to higher timeframe if bigger trend develops but still experimenting with how to do that.

Two things that concerned me about the trade..pivot was 215.19 and the round number 215.

I adjust my stop at 5 minute intervals. Currently +100.

Cheers,
CanuckCT
Jeff Singer, K2KV
  • #809
  • Jan 10, 2008 8:43am Jan 10, 2008 8:43am
my trade on uj for 10 pips.
It is a kind of a clasic escalatoe with all stoch pointing in one direction.
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  • #810
  • Jan 10, 2008 9:06am Jan 10, 2008 9:06am
Currently in a long trade per the attached chart - target set for 214.85 - target hit before I could post the chart. +22 on the trade.
Cheers,
CanuckCT
Attached Image
  • #811
  • Jan 10, 2008 9:19am Jan 10, 2008 9:19am
Canuck,

glad to see the 5 min is working for you. I'm a believer, at least with the way the market has been lately. This pair has channeled between 214 and 216 for awhile. It will eventually breakout, hopefully higher as I am sitting on a long term buy. I am curious to see if the plucking of pips will be as easy on the 5 min when it starts trending. I think it will be similar, although I think the number of really good opportunities will diminish some.
  • #812
  • Jan 10, 2008 9:47am Jan 10, 2008 9:47am
Hey pip,

I'm really liking the m5 entry, thanks to your posting. I've made it my own which is what you really need to do. What I see will be different than the way others see it. 5-3-3 (or 5-3-5 in my case) really does bounce between 20 and 80 all day long. The decision is quick and the move can be quick. And protection of profit is key. It can turn on you very quickly, which I believe is Glenn's point. Best to wait for the trade to come to you rather than force it. That is why I'm waiting for confirmation on M5 before entry. macd helps to identify pullbacks vs reversals for me. GJ can move 50 to 60 pips in 5 minutes. Get on the wrong side of that (which I'm due for), is why you have stops.

I did notice the ranging on the H4 chart. Trading M5 is just trading the range. When it does breakout it should be a big move and maybe an M5 entry will catch it.

Cheers,
CanuckCT

Quoting PipAV8tor
Canuck,

glad to see the 5 min is working for you. I'm a believer, at least with the way the market has been lately. This pair has channeled between 214 and 216 for awhile. It will eventually breakout, hopefully higher as I am sitting on a long term buy. I am curious to see if the plucking of pips will be as easy on the 5 min when it starts trending. I think it will be similar, although I think the number of really good opportunities will diminish some.
  • #813
  • Jan 10, 2008 10:40am Jan 10, 2008 10:40am
C,
Exactly right. Quick in and out, careful if you blink : but the moves are usually pretty good size. Tight stop is the key. I can lose 10, not 50. I definitely make sure the 15 m is in agreement. It helps if the bigger time frames are also. Making sure there is a "good" cross of the 80/20 is also important. Plenty of room between them, so don't try to anticipate. 20 a day seems pretty simple and that was always Spud's goal.
  • #814
  • Jan 10, 2008 11:37am Jan 10, 2008 11:37am
Hey Pip,

I was looking at higher tf of H1 for agreement, but agreement of m15 does make the most sense. It seems that a good cross up or below 50 significantly increase the chance of a profitable trade.

Here is another trade I'm just exited. Entered at 88.55 - see first chart. The second chart is where it is now. I exited at R3...89.44 (actually 89.40). Got lucky as was on the phone and didn't move my stop up. It would have been hit. AUDUSD is much tamer to trade and seems to be very good every other day. Thanks so much for helping me focus.

Cheers,
CanuckCT

Quoting PipAV8tor
C,
Exactly right. Quick in and out, careful if you blink : but the moves are usually pretty good size. Tight stop is the key. I can lose 10, not 50. I definitely make sure the 15 m is in agreement. It helps if the bigger time frames are also. Making sure there is a "good" cross of the 80/20 is also important. Plenty of room between them, so don't try to anticipate. 20 a day seems pretty simple and that was always Spud's goal.
Attached Images
  • #815
  • Jan 10, 2008 12:22pm Jan 10, 2008 12:22pm
Hi Cancuck,

Correct me if I'm wrong, but it looks like one of the signals that gets you in is when the stoch crosses the 50 line, is that right?

On another note, after a string of about 9 straight winners I got overconfident started taking some bad trades and have a mixed record so far this week. Once again, the psychological aspect rears it's ugly head.

Remember, don't take bad trades! Learn from my example! =)
  • #816
  • Jan 10, 2008 12:49pm Jan 10, 2008 12:49pm
CanuckCT

I have posted my Absolute strength inicator, which looks different to the one you have on your charts....

As far as useing it goes just wait till the red or blue comes off the bottom , the dotted line cross's the solid line and watch the seperation if it fans out then the move is strong, add a safety mesure you can wait for the red/blue line to cross...the one going up is the trend....

Of course I also use the MA cross and stoch cross the fib lines in a rope....to confirm.

Hope this helps....

P.S......I have not traded any of these indicators on a 5min tf as I see you are trading....my main concern with any indicator on a 5 min tf is noise and I really can not see how you can trade the noise....it must reduce your profit/loss ratio per trade and increase your stress level's...

I see PIP trade's for a living of a 5min tf, well done I know the stress it can cause....

I prefer to enter trade's and let them run for several days/weeks.....would be intresting what the return % a month is with the different methods...

Once again great thread k2kv and all the guys here....Hope my rambling's are usefull

Glenn
Attached File(s)
File Type: mq4 AbsoluteStrength_v1.1july 30..1.mq4   6 KB | 501 downloads
  • #817
  • Edited 2:05pm Jan 10, 2008 1:40pm | Edited 2:05pm
Hello ocelot,

I'm on a bit of a streak this week. I'm due to be creamed here any time. When I do I'll be sure to post it.

Here is what I look for:

5-3-5 stoch crossed and I like to see it just cross above or below 50 - that is my signal to enter.

Before I enter, I check MACD to see what it is doing. If it looks like it's about to cross zero that seems to be very good. Even better if you wait till it crosses zero.

I've added a momentum indicator also - now using the one Glenn provided.
I use stoch for entry but then I pay more attention to MACD, momentum, pivots, S&R and round numbers for exit points.

Let's say you are short..the stoch might go down to 20 and turn back up. Hopefully you are up a few pips by this time. You could take profits and close because there seem to be lots of trading opportunites.

What I'm seeing is that the 5-3-5 can turn back up and if it doesn't make it to 50 it will often turn back down. That's the retrace and the idea is to stay for that retrace and you are probably in for a bigger trade. If the stoch comes back up and price doesn't seem to be moving with it as strongly, that's what I look for. MACD helps to keep me in by also indicating a retrace in happening by not going back to the zero line. If it does head that way you best be careful.

I'm attaching the indicators I use for macd...some may find it helpful.

EDIT - When I finished this post I had a look at GJ and it fits what I'd look for...I'm not in this trade but would have entered somewhere on the candle after the dotted red line.

Cheers,
CanuckCT


Quoting ocelot
Hi Cancuck,

Correct me if I'm wrong, but it looks like one of the signals that gets you in is when the stoch crosses the 50 line, is that right?

On another note, after a string of about 9 straight winners I got overconfident started taking some bad trades and have a mixed record so far this week. Once again, the psychological aspect rears it's ugly head.

Remember, don't take bad trades! Learn from my example! =)
Attached Image
Attached File(s)
File Type: mq4 MACD_H4_300_v100.mq4   3 KB | 685 downloads
File Type: mq4 4h_MACD_FX_Strategy.mq4   5 KB | 606 downloads
  • #818
  • Jan 10, 2008 1:47pm Jan 10, 2008 1:47pm
Hey Glenn,

Thanks so much for all your input!

Your greater experience lends a somewhat different perspective and authority to your posts and -- I'm paying close attention!

You're right about trading M5 charts -- it can be extremely stressful as price jumps all over the place. However, I shy away from longer term charting since -- especially on GBPJPY -- the deeper drawdown one might experience in, say, a full hour, might be even harder to swallow. Frankly, I'd love to trade longer term with less stress, but until I gain more confidence in what I'm doing short-term, I can't imagine moving up.

Take care...



Quoting glenn5t
CanuckCT

I have posted my Absolute strength inicator, which looks different to the one you have on your charts....

As far as useing it goes just wait till the red or blue comes off the bottom , the dotted line cross's the solid line and watch the seperation if it fans out then the move is strong, add a safety mesure you can wait for the red/blue line to cross...the one going up is the trend....

Of course I also use the MA cross and stoch cross the fib lines in a rope....to confirm.

Hope this helps....

P.S......I have not traded any of these indicators on a 5min tf as I see you are trading....my main concern with any indicator on a 5 min tf is noise and I really can not see how you can trade the noise....it must reduce your profit/loss ratio per trade and increase your stress level's...

I see PIP trade's for a living of a 5min tf, well done I know the stress it can cause....

I prefer to enter trade's and let them run for several days/weeks.....would be intresting what the return % a month is with the different methods...

Once again great thread k2kv and all the guys here....Hope my rambling's are usefull

Glenn
Jeff Singer, K2KV
  • #819
  • Jan 10, 2008 2:10pm Jan 10, 2008 2:10pm
Hello,

does somebody has some experience with 1439 or Scalping system? I find all Spud systems very effective.

Have a great trades
Bruno
  • #820
  • Jan 10, 2008 2:27pm Jan 10, 2008 2:27pm
Quote
k2kvHey Glenn,

Thanks so much for all your input!

Your greater experience lends a somewhat different perspective and authority to your posts and -- I'm paying close attention!

You're right about trading M5 charts -- it can be extremely stressful as price jumps all over the place. However, I shy away from longer term charting since -- especially on GBPJPY -- the deeper drawdown one might experience in, say, a full hour, might be even harder to swallow. Frankly, I'd love to trade longer term with less stress, but until I gain more confidence in what I'm doing short-term, I can't imagine moving up.

Take care...
Thankyou for your comments.

I agree with your comments re: Daily/4hr on the G/J and I would discourage anyone new or with limited experince from trading this pair and would sujest they look at the eur/usd, gbp/usd or the aud/usd......where a SL of 50 pips will be fine.....
Of course if you use the Murry math lines you can set your Sl above the 4/8 or 8/8 lines and that should be ok......
When i trade off the dailies i dont use a SL at all......in the last 8 days the G/Y has fallen some 875 pips... and in the last 3 days the Aud/Usd has gone up some 255 pips on its way to 90.00cents plus...and the G/U some fall of 338 pips....

So there is very much a good profit to be made with the slower moving pairs....You should have a look at your stocth setup on a daily you maybe suprise at how clear the signals are .

Glenn
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