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The Art of Trading with MTF Stochastics

  • #961
  • Edited 3:39pm Feb 27, 2008 3:14pm | Edited 3:39pm
hi stochsters,

Here's the set-up I've been using recently with success. I tried just about every variation of spud's system and was always just left wondering whether a stochastic would continue or retrace. Or the Multiple time frames never lined up. Or there were so many confliciting signals I never entered any trades. Not really that much further forwards from a bare chart.

Even the thread system kind of left me in limbo. Although visual, I just never felt secure enough about it to ever trade it live. I kept getting spooked by the price and the variations in the stoch as it grew. Even the famous Spud "rope" which looks like an amazing no-brainer for trade-entry wobbles all over the place while it's forming.

So, then I tried the thread system on multiple time frames which helped quite a bit and I have all time frames from 1Min to Daily on the screen. As many people on this thread have noticed, you can see much better where the trend is going with the threads system on Multiple Time Frames, although Spud never really mentioned this (as far as I can remember). If I'm feeling really extravagant I'll even put the Weekly and Monthly charts on a second monitor. Of course they never move, but that's not the point. They serve to remind me of the journey the price has made to get where it is. And they often explain why the shorter time frame stochs don't act like you think they're going to.

But a great improvement (IMHO) was made by adding Boxinglife's Long-Term sexy stochs over the top of each time frame.

His excellent thread has all the details, but if you can't be bothered to read all 1,000 posts (shame on you) simply add these stochs to Spud's Thread System on each time frame:

20,10,20
50,10,20
100,20,30

Even though MTF Threads obviously give you the heads-up regarding longer term movement, having the Sexy Stochs overlaid really helps me keep track of the trend "energy" visually even if the price is stationary.

One of the things I found about using the Sexy Stochs system on it's own was that it missed lots of great entries. Using both Spud's Threads and Sexy Stochs together allows me to see long term trends, see more elasticity and also get good entries on the "peaks" of Spud's "threads".

With a bit of James 16's Price Action and a simple Bollinger Band we're all sorted!

Anyway, I'm up 10 trades out of 12 today, so I thought I'd share the love.

No-one talks about divergence between stochs on different time frames much. For me they're quite amazing. Perhaps I'll describe a little about what I see on another post.

Three cheers to Spud and BoxingisLife. Stochs rock!!

Happy trading.
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  • #962
  • Feb 27, 2008 4:11pm Feb 27, 2008 4:11pm
Hi Elchoco, and welcome to our thread.

I must apologize for being so quiet of late. I'm trying to work out some of my more serious trading issues, and it's just taking more time than I thought it would. So, that is my first priority and main point of focus right now; once I feel I've got my act together, I will renew my activity here in this thread.

For now, I'd just like to comment that I like what you're doing here and would like to see where you're headed, especially since I am a long-time devotee of the sexy setup.

I don't trade Spud's thread setup (just can't wrap my brain around it), but the thing I really like about the sexy setup is that is so totally simple to observe, with the single 5.3.3 (missing from your setup?) calling the entries. I like to jump between multiple time frames and when the trend is the same on more than one higher TF, I trade the 5.3.3 signal cross on a lower TF.

Looking forward to hearing more about your divergence techniques...


Quoting elchoco
hi stochsters,

Here's the set-up I've been using recently with success. I tried just about every variation of spud's system and was always just left wondering whether a stochastic would continue or retrace. Or the Multiple time frames never lined up. Or there were so many confliciting signals I never entered any trades. Not really that much further forwards from a bare chart.

Even the thread system kind of left me in limbo. Although visual, I just never felt secure enough about it to ever trade it live. I kept getting spooked by the price and the variations in the stoch as it grew. Even the famous Spud "rope" which looks like an amazing no-brainer for trade-entry wobbles all over the place while it's forming.

So, then I tried the thread system on multiple time frames which helped quite a bit and I have all time frames from 1Min to Daily on the screen. As many people on this thread have noticed, you can see much better where the trend is going with the threads system on Multiple Time Frames, although Spud never really mentioned this (as far as I can remember). If I'm feeling really extravagant I'll even put the Weekly and Monthly charts on a second monitor. Of course they never move, but that's not the point. They serve to remind me of the journey the price has made to get where it is. And they often explain why the shorter time frame stochs don't act like you think they're going to.

But a great improvement (IMHO) was made by adding Boxinglife's Long-Term sexy stochs over the top of each time frame.

His excellent thread has all the details, but if you can't be bothered to read all 1,000 posts (shame on you) simply add these stochs to Spud's Thread System on each time frame:

20,10,20
50,10,20
100,20,30

Even though MTF Threads obviously give you the heads-up regarding longer term movement, having the Sexy Stochs overlaid really helps me keep track of the trend "energy" visually even if the price is stationary.

One of the things I found about using the Sexy Stochs system on it's own was that it missed lots of great entries. Using both Spud's Threads and Sexy Stochs together allows me to see long term trends, see more elasticity and also get good entries on the "peaks" of Spud's "threads".

With a bit of James 16's Price Action and a simple Bollinger Band we're all sorted!

Anyway, I'm up 10 trades out of 12 today, so I thought I'd share the love.

No-one talks about divergence between stochs on different time frames much. For me they're quite amazing. Perhaps I'll describe a little about what I see on another post.

Three cheers to Spud and BoxingisLife. Stochs rock!!

Happy trading.
Jeff Singer, K2KV
  • #963
  • Feb 28, 2008 1:21am Feb 28, 2008 1:21am
Hi K2V2,

Thanks for the welcome. The 5,3,3 from sexy stochs is replaced by the thread system of spud (the lowest time frame of which is 6,3,3 by the way). The thread gives me a visual indication of "focus" of energy for the price move. Probably sounds weird, but if the threads are bunched tight when they pass up from 20 (for a long) then i can be more sure it's going to be a strong move.

Also, if ALL the threads meet below 20 before moving back up, then that too is an indication of strength, and I increase lot size accordingly. If only the fastest ones dip below 20, or perhaps don't even reach it before turining back, I either reduce position size or look at avoiding the trade altogether. It depends on what the higher time frames are saying.

I hear what your saying about sexy's easy looking entries. I guess for me there were always too many conflicting signals on different time frames for me to feel secure. Not sure why but all the time frames in my current set-up seem to "connect" together to produce a unified whole, a 3 dimensional view of the market flow. I never felt that with sexy stochs alone.

el choco
  • #964
  • Mar 2, 2008 1:35pm Mar 2, 2008 1:35pm
Just got crushed, these damn stochs keep changing on me. It all looked "up" on the long term charts so i took the beginnings of a retrace on the 1 hr and 15m charts. However the retrace retraced!! and what looked like a decent setup transformed into a dreary looking wrong way trade.

Note to self: "I always want to get in too early".

I'm reading James16 thread. One thing that stood out was "trade the breakouts otherwise you'll get chewed up in the consolidation".

The stochs offer all kinds of signals, but not all of them are in during good "trending mode". It would be good to filter out the consolidation trades.

I guess for the first time in ages I had a few days of luxury to sit in front of the screen. After 8 hours of waiting impatience got the better of me!

cheers
  • #965
  • Mar 2, 2008 2:37pm Mar 2, 2008 2:37pm
El Choco,

When you have conflicting signals that make you feel insecure, your feelings are correct -- you should stay out. But when you finally have agreement on several time frames, then -- and only then -- you should find your confidence and trade the setup. That is the beauty of the system, and a learned perspective.

It's easy to say, "I don't like the system because there are too many conflicting signals," when, in fact, the system is clearly doing what it is supposed to by trying to keep you out of trouble.

Sexy definitely will not give you every possible trade. No system will. But if you watch the setups on multiple time frames, and wait for them to concur, you will be rewarded with many, many good ones.

Good trading...

Quoting elchoco
Hi K2KV,

Thanks for the welcome. The 5,3,3 from sexy stochs is replaced by the thread system of spud (the lowest time frame of which is 6,3,3 by the way). The thread gives me a visual indication of "focus" of energy for the price move. Probably sounds weird, but if the threads are bunched tight when they pass up from 20 (for a long) then i can be more sure it's going to be a strong move.

Also, if ALL the threads meet below 20 before moving back up, then that too is an indication of strength, and I increase lot size accordingly. If only the fastest ones dip below 20, or perhaps don't even reach it before turining back, I either reduce position size or look at avoiding the trade altogether. It depends on what the higher time frames are saying.

I hear what your saying about sexy's easy looking entries. I guess for me there were always too many conflicting signals on different time frames for me to feel secure. Not sure why but all the time frames in my current set-up seem to "connect" together to produce a unified whole, a 3 dimensional view of the market flow. I never felt that with sexy stochs alone.

el choco
Jeff Singer, K2KV
  • #966
  • Edited 3:17pm Mar 8, 2008 10:49am | Edited 3:17pm
Hi K2V2,

I guess what I meant was that there seemed to be so many opportunities for profit that I didn't take because of the conflicting signals on different time-frames. I wouldn't have minded if there was a messy period of consolidation that it saved me from entering

All that notwithstanding, I stripped down the indicators to (merely) Multiple Bolinger Bands and the Spud "thread system" on 1 hour, 15 min, 5 min and 1 min and spent Friday afternoon scalping the tail of the NFP. Nice. I made about 5k on demo so moved over to live before the momentum and my confidence ran out and picked up about 600 euros. I'll try the stripped down version again on monday.

I think I was making it all more difficult than it need be. (perennial habit)

Hope you get yourself back in the game PDQ.

Cheers for now.

El Choco
  • #967
  • Mar 17, 2008 2:31pm Mar 17, 2008 2:31pm
I'm using Metatrader 4 and am looking for the template or whatever that everyone is using which places the 4h/1h/30m/15m stochs all in one window or some instructions on how to do so manually. Can someone help me?
  • #968
  • Mar 18, 2008 10:53am Mar 18, 2008 10:53am
Hi

I like this one! Trading MTF stoch is really nice after some practice.
I made about 300-400 pips yesterday using "the rope" by spud.

I just wonder why most of MTF-stoch threads seem to be dying.
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  • #969
  • Mar 18, 2008 11:45am Mar 18, 2008 11:45am
Hi Dan,

Why not show us how you traded? A couple of detailed images with accompanying test illustrating what compelled you to enter/exit (and what we should be on the lookout for) would surely be worth a great deal to those of us who may not feel totally confident relying on stochastic signals, and would be very much appreciated by this group. 300-400 pips is pretty impressive; let's see how it's done!

Thanks!

Quoting DanFX
Hi

I like this one! Trading MTF stoch is really nice after some practice.
I made about 300-400 pips yesterday using "the rope" by spud.

I just wonder why most of MTF-stoch threads seem to be dying.
Jeff Singer, K2KV
  • #970
  • Mar 18, 2008 12:43pm Mar 18, 2008 12:43pm
Ok, here is my best trade from yesterday. Itīs good for me to look at it a second time myself.

Iīm sorry i cannot insert the picture cause i dont know how but it is attached.
I have to say, that i am not an expert on stochs but i am willing to learn and become an expert one day

I have recently started experimenting with the rope but have been playing arround with other MTF methods for few months before, especially sexy stochs by boxingislife and read all of spudīs stuff.

I simply watched gbp/jpy m15 chart and watched the stochs for a while. at the end of the 20:30 candle they were all close together looking like turning down. I entered 2 mins later at 20:47 when price began to fall.

watching the rope going down the trade was up over 120 pips after only 30 minutes. unfortunately i didnīt close the trade by that time cause i wanted to ride it even further and wanted to wait for an exit signal (everthing demo only so it doesnīt hurt to test) still gettong 88

I know this amount of gained pips is a lot, but the market moved quite good yesterday, especially to the downside . I donīt think that this can be repeated day by day but i am gaining confidence in trading MTFstoch setups more and more. Spud said heīs going for 20 pips daily and in my opinion this is more than do-able with his approch.

Im normaly getting 50 daily on average and i have just started to
explore FX.

Sorry for my english, hope everybody understands.
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  • #971
  • Mar 18, 2008 1:12pm Mar 18, 2008 1:12pm
here is another trade. The rope is not perfectly established but i entered at the open of 16:45 candle. Early exit because price failed to break through 2.0000 which might be a big phsycho-level. Therefore I closed the trade without an exit signal from stochs.
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  • #972
  • Mar 18, 2008 5:56pm Mar 18, 2008 5:56pm
Quoting DanFX
here is another trade. The rope is not perfectly established but i entered at the open of 16:45 candle. Early exit because price failed to break through 2.0000 which might be a big phsycho-level. Therefore I closed the trade without an exit signal from stochs.
Yes, I am beginning to enjoy the Spud Stochastics (although I had a bad trade with them today). Dan, what hours do you look for trades?
  • #973
  • Mar 18, 2008 11:39pm Mar 18, 2008 11:39pm
I donīt have fixed "trading hours" because of my day job. I usaually get home arround 15 GMT and am watching the charts from time to time for the rest of the day. Many good moves unfortunately already happend until i get to look for trades.


There was a perfect rope yesterday on gbp/chf m5 at 19:35. I didnīt take the trade but have been in a bad one too after pulling the trigger to fast (close to be now). Just want to insert the picture for the look of this rope. All the stochastics look like "one" which is good.
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  • #974
  • Mar 20, 2008 8:59am Mar 20, 2008 8:59am
This was always going to be a good title for the thread and I am very grateful to k2kv for keeping the subject alive. I'm still trading MTF stochastics and still the original Spud system but because I was finding it a bit stressful to trade larger lots by this method I have changed things a bit to suit my own style of trading.

I look at the daily stochastics and even the monthly. When I enter I expect a trade to last a day, or two, or more. Because I always check the mtf stochastics 15;30;60;240 I usually seem to get a fairly good entry and it helps with exits. Because I'm looking for bigger moves than a few pips I enter with smaller lots and can add to them if things start to go well and look as if they will continue. Also, I can break Spud's rules a bit and still enter when everything looks overbought/sold on the lower time frames. Also, with a graded entry and smaller lots the dreaded pullback is less of a worry.

I tend to use a bit of knowledge I picked up from Phillip Nel's 4 hour strategy thread so I also look at MACD and RSI. The only original tip I can give here is that I hardly ever enter a trade when the MACD is hovering around zero levels. For example, on GBP/JPY, I set my MACD levels at 0.2 and -0.2 (this is for 5,13,1). This signifies a knot of moving averages and can lead to unexpected whipsaws. Usually, your trend lines and support and resistance areas, if you have drawn them, back this up.

I am looking at price action a la James 16 thread and finding that helpful. It's clear from some of the more perspicacious posters there that I have a lot to learn. But I have found that even a little knowledge in that department is valuable.

If I see a classic Spudfyre set up I still trade it, can't resist! But it's for smaller lots and when it suits me.

Anyway, I seem to be getting luckier at the moment, and more consistently lucky, so I thought I'd post this. If it was of some interest I would post a few charts of recent trades good, bad and ugly. Hope it was of some interest...
Gone to a better place
  • #975
  • Mar 25, 2008 3:32am Mar 25, 2008 3:32am
Just a note,

I've been playing around with the stoch settings for MTF. I use daily, 4 hr, 1 hr and 15 min.

Using the sexy stoch approach with three lines on one chart I find that (15,x,12) better mirrors the (5,x,3) on the next higher time frame. (I never use %D).

I also use (20,x,12) to give some sense of momentum on the slower stochs.

I found the original settings gave too many conflicting signals, and now I can use a mixture of spuds "escalator" strategy together with the sexy stochs patterns.

I'm still playing to get a best fit.

Here's a pic. (note the three perfect sexy-stoch short entries)
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  • #976
  • Mar 26, 2008 10:26am Mar 26, 2008 10:26am
I've never read up on the "Sexy" thread, only been trading Spud's method. Is it better than the MTF or a variation of it? Which would you prefer?
  • #977
  • Mar 31, 2008 7:06am Mar 31, 2008 7:06am
I'm still in the process of reading the whole thread, but I thought I'd post this demo example I just completed.

This is a great method, and so versatile, judging by all the different styles I've seen on this thread so far. My thanks go to Spud and boxingislife for their invaluable instruction.

Any comments or suggestions would be welcome.

Cheers
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  • #978
  • Mar 31, 2008 7:31am Mar 31, 2008 7:31am
Hi eyevoltage,

Welcome to MTF Stoch...

My chart is similar to yours. Just that I'm trying to simulate higher tf Stoch with bigger Stoch setting (because I want to trade with pda which don't support custom indicator). Also I like to use 50/00 level.

jackt
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  • #979
  • Mar 31, 2008 7:51am Mar 31, 2008 7:51am
Quoting jackt
Hi eyevoltage,

Welcome to MTF Stoch...

My chart is similar to yours. Just that I'm trying to simulate higher tf Stoch with bigger Stoch setting (because I want to trade with pda which don't support custom indicator). Also I like to use 50/00 level.

jackt
Hi Jackt.
I've been using the psych levels 50/00 as well, but when you add pivot lines and fibs, it can all get a bit confusing. I guess one has to decide which ones to work with and ditch the rest, so I use pivs and fibs.

What's pda, by the way?
  • #980
  • Mar 31, 2008 8:46am Mar 31, 2008 8:46am
Quoting eyevoltage
Hi Jackt.

What's pda, by the way?
pda stand for personal digital assistant or something like that.

I use it during working hour. Actually it's a pda phone running on windows mobile 6 and mobile mt4.

Still testing the idea. So far 5 trades on the pda phone. 3 win 1 lost 1 b/e. Not bad I think for looking at tiny 2.8" screen and got to make a decision within 2-3 mins.

jackt
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