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bringin sexy back - stochastics

  • #1,801
  • Apr 5, 2008 3:27pm Apr 5, 2008 3:27pm
Here's some other entries on the same chart. I guess this is what I'm used to seeing.

There are some other sharp moves that did not give signals as far I understand them. Perhaps they would have shown up on different time frames. Or there again, perhaps they were just ones to watch go by...
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  • #1,802
  • Apr 5, 2008 4:14pm Apr 5, 2008 4:14pm
Hmmm....

I'm with ElChoco on this one! I DON'T like the trades where the MED/SLOW stochs are in the OB/OS zones. Far to risky. Like ElChoco, my rule is:

- if the MED/SLOW stochs are trending firmly UP between the 20/80 lines then BUY on the DIPS of the FAST,
- if the MED/SLOW stochs are trending firmly DOWN between the 20/80 then SELL on the PEAKS of the FAST.

OK, there are not so many opportunities but it seems safer to me. And you're all correct in one thing -- sitting looking at the chart waiting for that rare(ish) setup is SOOOO hard!

CB.
  • #1,803
  • Apr 5, 2008 6:12pm Apr 5, 2008 6:12pm
Oho! The missus has gone away for the w/e to visit her parents so giving me scary amounts of time to devote to the MAIN TASK! I have had MT4 over a week now and a few solid evenings coding and I have just about cracked the MQ language. I can write indicators, templates, EA's etc no problem. (Luckily the whole thing works like C++ so it's easy).

I have tried to build a few rules into an indicator/EA. I am trying to avoid watching the charts all day!! I just want the PC to go "ping" when I need to do something.

The attached chart is my very first attempt at capturing the simplest rules we have discussed in this thread in a few lines of custom code. LOOOOONG way to go yet but looks kinda OK for Version 0.00001.

CB.
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  • #1,804
  • Apr 5, 2008 6:32pm Apr 5, 2008 6:32pm
red dots = short entries, blue dots = long entries ????

Could you post the rules you've decided on?
  • #1,805
  • Apr 5, 2008 6:53pm Apr 5, 2008 6:53pm
Quoting elchoco
red dots = short entries, blue dots = long entries ????

Could you post the rules you've decided on?
Sure - the red DOWN arrows mean SELL and the blue UP arrows are BUY. Can't get much simpler than that!

The rule in the EA is just what we have all discussed : When the MED/SLOW stochs are UP buy on dips of the FAST. When the MED/SLOW are DOWN, sell on rallies in the FAST. That's the only rule I properly understand.

My problem is that Boxing, Melpheos and JD post charts with trades all over the place that I can't tie up with any hard-and-fast rules. If I understood the rules, coding them is a snap.

CB.

BTW, I am in the UK timezone (in sunny Yorkshire, near Wuthering Heights just outside Thornton Village where the Bronte's were born).
  • #1,806
  • Apr 5, 2008 7:19pm Apr 5, 2008 7:19pm
Here's the same chart as the last one but with Rule (2) added (my best understanding - which isn't saying much - of one of Melpheos' variants). It is interesting to note that often the Rule (1) / Rule (2) trades co-incide but sometimes Rule (2) captures an opportunity Rule (1) misses. This is probably why Melpheos is bagging pips like a demon!

Honestly, guys, if we can just decide what the rules are, writing an indicator/EA to do all the hard work us is 20 minutes work tops.

CB.
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  • #1,807
  • Edited 8:16pm Apr 5, 2008 8:03pm | Edited 8:16pm
Codebreaker, so you're a C programmer eh? I'm VB.Net, Perl, ASP but no C or C++. I'm trying to find the time to sit there and figure the MQ4 language out but don't have enough time to devote to it yet. Thanks for getting involved. I understand what you're saying about the hard and fast rules. The problem for me is that I'm still trying to nail the rules down in my head and then of course there are varying times when an opportunity presents itself that is not part of the rules. I'm sure we'll work thru it all though.
  • #1,808
  • Apr 6, 2008 3:50am Apr 6, 2008 3:50am
Quoting Codebreaker
The rule in the EA is just what we have all discussed : When the MED/SLOW stochs are UP buy on dips of the FAST. When the MED/SLOW are DOWN, sell on rallies in the FAST. That's the only rule I properly understand.
The reason I asked for your rules is that I couldn't see a single EA entry on your chart where I would have got in!!

Can I clarify what you mean here? Let's consider just a long trade. When you say "buy on dips of the fast" do you mean "buy when the fast stoch dips down"? This would tie in more with the arrows on your chart.

My understanding is that the dipping down of the fast stoch just gives a "heads-up" if your trading live and then we enter when the fast stoch turns around and rejoins the direction of the slower stochs.

Therefore, don't go long as the fast stoch dips down but wait until it starts going back up again. I think that would give you a whole different set of signals.

The stochs are just reflecting a retrace of an existing trend. EG, there's a strong move north, price cuts back a little bit, and you jump in long (at a cheaper price) when price returns in the original direction.

I've put some arrows on your chart showing sexy stoch entries that I might have considered. To be honest neither of them are particularly great in hindsight. I would hope that some of the other big price moves that we see on your chart would have shown up on other time frames.

This is only the way that I use Sexy stochs, others may have different ideas. Boxing's last post had me totally confused so I'm still on this.

Also, you might want to consider whether you want the EA to trade the asian session (depending on the currency). You'd probably get loads of silly little entries that eat away at your profits.

Hope your enjoying your free weekend, it's been a long time since I was in Yorkshire. I must say that I had the best lemon pie of my entire life in a pub somewhere in the Dales. Now based in Barcelona.

Happy code-ing.
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  • #1,809
  • Apr 6, 2008 5:12am Apr 6, 2008 5:12am
OK - after 1800 and something posts we seem to be getting to the crux of this matter. The Team comprise of half a dozen (obviously) very bright guys with international positions in IT, Universities, etc. If we can each look at a simple chart with 3 wavy lines are all interpret that chart in totally different ways, then we have a problem of philosophy.

There is little point in fiddling about optimising stochastic settings, entry and exit points etc until we all agree how the system works!

I think the entry points on my chart for Rule (1) trades are clear. [Rule (2) I am not so sure about as I don't understand it - we need Melpheos to clarify]. When the MED/FAST stochs are heading say NORTH and there is a DIP in the FAST stoch, you BUY. Note that in order to know when the dip has finished and the FAST stoch is heading north again with the others you have to wait until the "V" bottom has fully formed. That is why my signals are LATE compared to the V bottom. But they are still quite good on SOME pairs in SOME timeframes. Same but opposite goes for SHORTS.

But can we please all try to list our understanding of the RULES so we can get a concensus on this. To avoid the ambiguity of language, perhaps the best way is pseudocode, eg:

IF (SLOWstoch heading SOUTH) &&
(MEDstoch heading SOUTH) &&
(FASTstoch < MEDstoch) &&
etc, etc
THEN (SELLsignal = true)

Just take a look at the source code of Melpheos' StochV indicator to see how this is done. Once you have the MT4 basic indicator template, coding the rules is trivially simple and it is obvious (even to a non-coder) what his rules are. Problem is, there are so many of them and some don't seem to work - as Melpheos is the first to admit (Ref. Post 1678)!

Thanks,

CB.
  • #1,810
  • Apr 6, 2008 6:08am Apr 6, 2008 6:08am
As i said in a previous post a few days ago, I think it's going to be hard to get firm rules on this. There's MTF to consider and Divergence and bits and bobs of Price Action and Support and Resistance. No idea how you'd go about coding these relationships.

BUT, that doesn't mean that that more complex decision processes haven't been modelled. I'll have to sit and think it all through for you.

Will respond more fully later, off to have lunch on the beach.

Looking forward to your next chart!!
  • #1,811
  • Apr 6, 2008 6:10am Apr 6, 2008 6:10am
Right, Guys, here is my final chart of the same chunk of data as the last 2 charts I posted.

I have only 3 rules (obviously marked 1, 2, and 3 on the chart attached):

Rule 1 -- highest likelihood of success

Rule 2 -- next highest likelihood of success

Rule 1 & Rule 2 together -- GO FOR IT!!

Rule 3 - rather speculative if feeling brave.

If anyone has any other rules, I want to hear from you! Otherwise, I am going to try my shiny new ODL Demo account that MT kindly opened (automatically) for me first thing Monday morning. Time to road-test this baby!

CB.
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  • #1,812
  • Apr 6, 2008 6:24am Apr 6, 2008 6:24am
For the life of me I still can't see how most of your EA entries relate in any way to the rules you've set . I must be totally missing the point.

I guess the important thing is: Is it profitable???????!!!!!! Guess weŽll find out on Monday !

Speak soon.
  • #1,813
  • Apr 6, 2008 7:32am Apr 6, 2008 7:32am
Codebreaker, those Rule 1 && 2 entries together are right on the money! But as Elchoco says, I can't see how your EA picks those either with regard to the rules you've set. Pretty smooth though, I must say I'm dying to find out how it works on Monday.
  • #1,814
  • Apr 6, 2008 9:07am Apr 6, 2008 9:07am
Great Start, Codeworker. Wish I could program!

1. I hope Boxing can help in enumerating the rules.
2. From my understanding, there wre are two core ways you can play this strategy. This is within the timeframe, and the secon is with reference to other timeframes.

1. Within the timeframe - lets say we were on M15.
a. The first step would be to consider the position of the 20 and 50 stoch. If 20 and 50 are in overbought zone, i.e., 80+, there is a chance of the uptrend continuing. When the 5 dips down, and then crosses up through its signal line, buy. Therefore, IF 20 and 50 > 80, and %k>%d (if thats the correct terminology for the main/signal line) and %k between 0 and 30 (( this to say that it is not crossing or moving up midway but from the lowest dip)) then BUY. You'll find that when the 5 crosses up from below 20, that is a stronger move.
b. When 20 is above 50 and main line is aboce the signal line ( indicating the two stochs movig up), then the 5 dips down and then crosses up through its signal line, BUY ( per example of 5 above).

Reverse for SELL.

2. MTF. A bit more complex, I think. I'm still studying the charts to determine when to take trades based on trend and countertrend, using higher timeframes for trnd and lower ones for entry. I don't think thinkcountertrends should be ignored, since apart from the pips, these could be signalling reversals.

But, thanks for taking the initiative - I'm sure Boxing/Melpheos and others will help out as well!

Regards
Pardy
  • #1,815
  • Apr 6, 2008 9:15am Apr 6, 2008 9:15am
Quoting Codebreaker

CB.

BTW, I am in the UK timezone (in sunny Yorkshire, near Wuthering Heights just outside Thornton Village where the Bronte's were born).
CB, you spoke too soon! I'm in Durham and its sowing quite heavy here. BTW I have lived in Doncaster some time ago. Went to Grassington in the Dales once - beautiful.

Pardy
  • #1,816
  • Apr 6, 2008 9:23am Apr 6, 2008 9:23am
Quoting boxingislife
msn works. im in beirut so im like 2 hours ahead of u i think.
next wednesday im free. i know jdcompute wants next friday so next ill ask codebreaker and elchoco if either of em would like wednesday.

and pardy will go from there on setting a date or if u would like a specific date in the future then thats fine too.

Thanks a great deal. This Wednesday is difficult for me - prior appointment, but can do Th/Friday if that is possible. Failing that Mon next week. Look forward to understanding how to use the multi - tf's

Regards
Pardy
  • #1,817
  • Apr 6, 2008 12:58pm Apr 6, 2008 12:58pm
Quoting Pardy
Great Start, Codeworker. Wish I could program!

1. I hope Boxing can help in enumerating the rules.
2. From my understanding, there wre are two core ways you can play this strategy. This is within the timeframe, and the secon is with reference to other timeframes.

1. Within the timeframe - lets say we were on M15.
a. The first step would be to consider the position of the 20 and 50 stoch. If 20 and 50 are in overbought zone, i.e., 80+, there is a chance of the uptrend continuing. When the 5 dips down, and then crosses up through its signal line, buy. Therefore, IF 20 and 50 > 80, and %k>%d (if thats the correct terminology for the main/signal line) and %k between 0 and 30 (( this to say that it is not crossing or moving up midway but from the lowest dip)) then BUY. You'll find that when the 5 crosses up from below 20, that is a stronger move.
b. When 20 is above 50 and main line is aboce the signal line ( indicating the two stochs movig up), then the 5 dips down and then crosses up through its signal line, BUY ( per example of 5 above).

Reverse for SELL.

2. MTF. A bit more complex, I think. I'm still studying the charts to determine when to take trades based on trend and countertrend, using higher timeframes for trnd and lower ones for entry. I don't think thinkcountertrends should be ignored, since apart from the pips, these could be signalling reversals.

But, thanks for taking the initiative - I'm sure Boxing/Melpheos and others will help out as well!

Regards
Pardy
Boxingislife described the rule in the first post and in the following posts with screenshots.

The other rules are really experience only. Sometime i can trade without even looking at the stoch just by looking the price action

But for countertrend, i must say i've never been lucky (success rate of 3 to 10 => 70% failure ) and never been able to formalise any clear rules for them...
  • #1,818
  • Apr 6, 2008 1:53pm Apr 6, 2008 1:53pm
Quoting melpheos
Boxingislife described the rule in the first post and in the following posts with screenshots.

The other rules are really experience only. Sometime i can trade without even looking at the stoch just by looking the price action

But for countertrend, i must say i've never been lucky (success rate of 3 to 10 => 70% failure ) and never been able to formalise any clear rules for them...

Hi Melpheos,

It is precisely to capture what works/doesn't work from your experience that helps in enumerating or re-enumerating the rules.
Where counter-trends are concerned, what I had in mind was say a pullback on H4 might last an hour (eg. short in an overall long trend). This would show as a short trend in H1, and could be capitalised on in say M30/M15 charts.

I'm still learning, of course, and bow to your superior knowledge andexperience. Just going thru the entire thread in a lot more detail.

Thanks for sharing your experience. Many many pips to you.

Regards
Pardy
  • #1,819
  • Apr 6, 2008 4:24pm Apr 6, 2008 4:24pm
Quoting Codebreaker

But can we please all try to list our understanding of the RULES so we can get a concensus on this. To avoid the ambiguity of language, perhaps the best way is pseudocode, eg:

IF (SLOWstoch heading SOUTH) &&
(MEDstoch heading SOUTH) &&
(FASTstoch < MEDstoch) &&
etc, etc
THEN (SELLsignal = true)

Thanks,

CB.
Hi CodeBreaker.

Can you post the rules you used to program your EA? I would want to test them on TradeStation because it's much more precise than MT4.

Thanks,
  • #1,820
  • Apr 6, 2008 11:05pm Apr 6, 2008 11:05pm
pls personally, i want you yo educate me the more on your setting and hw to go about it thanks.it looks a bit different, though i know it s the same concept
Quoting melpheos
Crap i missed this trade, i got a work call and when i looked back at the chart is was too late...

Anyway, it was NFP today so it's never a good idea to trade such day if your not a news trader.
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