Spuds Stochastic Thread Theory

Thank you all for bringing this thread back to the top. I have been looking for a shorter timeframe system to complement a daily trading system, and I had honestly forgotten about Spud's stochs.

I will only be trading this on demo for a while, but in looking back at the data, looks like there are several setups that the stochs can show in addition to the ropes (though the ropes may be the safest). Below is one example I just saw, and then came back 10 minutes later and saw that the price had jumped 200 pips.

This chart is the 1 hour GBPAUD chart. I would not have made this trade because the markets are going CRAZY right now, but it is an example of what the stochs can show.

Although this setup is not quite a complete rope, there are no stochs below the 14,3,3 stochs and the shorter term stochs are going up. It could have been a great trade.

I hope to help bring this thread back to life!

I saw this thread a while back and tried the system out. I did pretty good with it but continued to try other systems. There are only a few that truly work out there. I came back to use this one for short-term trading (1 hour charts), and I use the Ozfx system for long term (daily charts). I hope this thread gets more action because the theory is great and it works. I use a 35 pip SL and let the winning trades go till the stochs tell me to get out. Good luck to all, and thanks Spud.

Hello` Spuds and congrat 4 your system. I like to work with Stochastic,so it suit my trading style.The only problem I have is to show only the %K lines and not the %D when I set up the Stochastics.The best way I could do that was to choose white as colour for the %D lines,so that they won't show on the chart, as the background is white too, but I'm not sure that is the correct way to do that, as they still interfere and the patterns don't seem quite as clear as yours.How did you get rid of the %D lines when you set up the Stochastics, any suggestion? I use VT Trader as charts. I hope you can help me with this.Thanks hips.

If I remember correctly it is a "walk the wall" and a bit of comb pattern.

I would add some s/r (eg pivot), trend line and may be BB to validate the entry.

jackt

CANT YOU POST YOUR TEMPLATE WITH THE INDICATOR SO DO ITS RULES OF ENTRY AND CLOSE?

Hi B@by trader,
emda makes the indicators and Spuds Stochastic Thread Theory are the rules.
I'm not using this template but working on something similar.

Stochastics set up
Hello` Spuds and congrat 4 your system. I like to work with Stochastic,so it suit my trading style.The only problem I have is to show only the %K lines and not the %D when I set up the Stochastics.The best way I could do that was to choose white as colour for the %D lines,so that they won't show on the chart, as the background is white too, but I'm not sure that is the correct way to do that, as they still interfere and the patterns don't seem quite as clear as yours.How did you get rid of the %D lines when you set up the Stochastics, any suggestion? I use VT Trader as charts. I hope you can help me with this.Thanks hips.



Hi Tabata,

I'm not familiar with VT platform, but MT 4 has a "none" box on the top of colors menu. rather than any color choice.

Hope this helps.

Peter O.

Hello` Petero and thanks for replying to me.I don't use MT4, and I don't think VT has got the "none"option that you mentioned. But I appreciate your effort to try to help me.I guess I'll have to use it like this. I'm working on a pattern that seems quite regular,but I won't say anything until I'm sure it's not just an allucination, as I'm still recovering from blowing up my second (or is my third?!?) account, exactly the same way,which it's telling me that I'm not all there, not to say words more specific like "idiot", "dam", "stupid", "insane", "crazy"etc,etc.etc.

is nice to see that some more people is using the indicator... I'll post my latest templates.

this is my current setup

Here's a nice movement, I wonder if anyone caught it...

Hello

I am new to Spud's theory but very interested in it. I have read his "Elevator to Pips" document and understand that the Thread Theory has grown out of these earlier ideas. One important question for an expert, if I may, please....

In the Elev 2 Pips doc he says to use SLOW Stochastics (5,3,3,) for the 4 time frames. In the Thread Theory he says to use (K,3,3) for K = 6 to 24. Am I right in thinking I should plot the SLOW %K and not the fast %K.

Reason I ask is I program all my own stuff in MatLab so don't use any of the templates on this site. I can program either the Fast, Slow or Full stochastic no problem - I just need to know which one folk are using!

Many thanks in advance for any help.

yes.. plot only the K line of the SLOW stoch.

why don't use use metatrader?

Hi Emda

Many thanks for you quick reply - I have read your many knowledgable posts in these forums and am grateful to get feedback from such an experienced expert as yourself.

I use MatLab because I have been using it for 20 years since version 1.0 (it is now in version 14!) It is the industry standard mathematics and signal processing development environment. I can program anything I want in a few minutes without learning a new language.

AND... Recently MatLab added the Datafeed Toolbox allowing MatLab to plug into any financial data feed so it is basically now an on-line platform. So while it is not specifically designed with trading in mind (like Metatrader etc) it is probably 2 orders of magnitude more powerful than such packages when it comes to implementing signal processing. e.g. An advanced digital filter is just 1 line of code!

Thanks again,

Very interesting Codebreaker
it is not the first time I know a trader using Mathlab.

only remember that what is important at the end is making money. ANd DO not spend too much time programming but making money. Making money can be done also in Excel without any indicators... just Money Management.

Would be interesting to see a screencapture of this mathlab beauty

Hi Emda

MatLab is very big with over 40 million users worldwide. You can read about the Datafeed Toolbox here:

http://www.mathworks.com/products/datafeed/

and there are lots of screenshots on the Web. One of the most powerful features of MatLab is its extremely powerful graphics capability. You can essentially produce any kind of chart you want and customise it fully. You can even add photorealistic lighting.....

http://www.mathworks.com/matlabcentr...84/matlab5.jpg

MathWorks (the authors) are pushing MatLab hard in the City, trying to make it the industry standard for advanced financial analysis. They are regularly holding FREE 2-day training courses for folk wanting to learn how to use the software.

But, thanks to your advice, I now have MetaTrader too!! After a couple of hours I am getting more familiar with it, and I think it looks excellent! So now I have the best of both worlds!

Thanks

CB

Hello Everyone

I have been thinking about the whole idea of stochs on multiple and single time frames and I have a question....

Clearly, longer time frames can be made from shorter ones quite simply. For example, if we have M15 bars, then to make H1 we would just group them in blocks of 4 bars. We make the OP of the H1 bar the OP of the M15[t-3] bar, the HI of the H1 would be the highest high of the block, the LO would be the lowest low of the block and the H1 CL would be the CL of the M15[t] bar. I have verified this with data dumped from MT at different time frames. (It is kinda obvious anyway but I just wanted to be sure!!!)

In the Elev2Pips methodology we have 4 TFs, viz, M15, M30, H1 and H4 each with a (5,3,3) stoch. But what is a stoch? It merely measures the ratio of the (current CL - LL{n}) / (HH{n} - LL{n}) over some specified time interval of n bars.

So... Since the longer timeframes are just made of the shorter, we could surely set up the E2P methodology on a single M15 chart with the following stochs:

(5,3,3) as per the original
(10,3,3) to imitate the M30 (5,3,3) stoch
(20,3,3) to imitate the H1 (5,3,3) stoch
(80,3,3) to imitate the H4 (5,3,3) stoch

When I do this, I get a similar set to the separate charts, but they seem much noisier. Anyone care to comment why this should be?

BTW, if I use (k,1,1) stochs to remove the smoothing, I have verified manually that at the TF boundaries (ie every hour for the H1, M30, M15 and every 4 hours for the H4, H1, etc), I get identical spot values on the stochs in both systems. It is just that between the values, the stochs are quite noisy.

I am thinking that the reason may be to do with the fact that we are effectively "sliding" a window along the data and computing intermediate values that are not there in the individual charts. e.g. In the separate charts, the H1 data is effectively computed at HOURLY INTERVALS in M15 blocks as:

M15[t-3] to M15[t]
M15[t-7] to M15[t-4]
M15[t-11] to M15[t-8]
etc
etc

but in the all-in-one chart the H1 data is computed IN M15 INTERVALS:

M15[t-3] to M15[t]
M15[t-4] to M15[t-1]
M15[t-5] to M15[t-2]
etc
etc

I think this is the critical difference between the E2P theory and the Stoch Thread Theory. I have found E2P works well with 4 separate charts but not so well combined in 1 chart as described above. Threads are harder to make work then E2P I think for this reason. If we can reconcile these ideas I think we can refine the systems even further.

Thoughts and comments VERY welcome.....

CB.

nice that you are working with the MTF stochs

what is nice of the stochs threads is that you have a feeling of the surrounding timeframes of the chart... by using K parameter from 6 to 26.. ANd then if you use it in two timeframes.. or 3... then you have a very good vision of the whole depth of the multiple timeframes.

look my post number 84 http://www.forexfactory.com/showpost...0&postcount=84

there is a multi timeframe template of my indicator... and it is more than enough to trade successfully and make money.. Which is the important thing at the end.

However... I do not recommend to trade with many many timeframes. Usually trading with two timeframes in mind is enough. You only have to find the proper risk for your timeframes.

Hi Emda

Thanks again for you prompt response. I see from your excellent indicator that on the M30 threads you plot every point, on the H1 you plot every other point and on the H4 you plot every 8th point. This ties up with my thinking and experiments so I am very happy :-))

Now, a horrid newbie question... I have had MatLab for 20 years but MT for less than 48 hours! I have downloaded your zip file of your MTF Threads. Where do I put the unpacked files and how do I load the template? (Sorry - I know this is not a question for this forum but I am anxious to get your indicator up and running next to my MatLab versions so I can make a good comparison).

Notwithstanding the old saying about "Old dogs and new tricks" I must set to and learn MT language so I can program in it and contribute better to the forum.

Thanks

CB

template goes into the templates folder...
indicators are into the experts/indicators folder
then restart MT4 and you will see them in the list of custom indicators

I encourage you to leanr MT language.. is easy.. you will see....

You may like this page.. with articles.. and some other good indicators.
http://articles.mql4.com/

Emda Can You Give Me The Template For This Strategy?(latest)with an alarm?maybe
My Template Doesnt Seem Correct....

http://img509.imageshack.us/img509/8126/stochjz6.gif

ABOVE LINK IS IMAGE OF MY TEMPLATE AND SOME QUESTIONS......