Stochastic secrets

Just a quick follow up on that subject. Did you ever wonder why do all Brokers offer you demo accounts before asking you for your Money? Yet 98% of all forex traders are losing money.... Hmmmmmm

Big E, thanks for all the examples. I still have a problem though filtering out the losing trades on 5M and especially 1M. For example in post #198 left side of chart the stoch appears to cross down 4 times between the second and third vertical red lines. Each one would have been a loss. The yellow ema was still sloping downward on the first two of the losing trades confirming a short. I know you could say the red stoch line was heading up but on the last trade on the right of the chart you took a short trade counter to the preceding slope of the red stoch line. Adding RSI isn't a big help.

Even using both the 5,3,3 and 25,2,3 I see losers that seem like they could nickel and dime away your profits. Sometimes just looking at the candle bodies of possible past trades on MT4 they may appear to be winners but there are wicks that would have put you temporarily negative 5 or more pips which may have caused you to close the trade with a loss.

Maybe I am just too tired right now. Big E, what do you feel is a realistic win loss record using the 2 stochs? 100 pips/day on EUR/USD with a small SL (maybe 8-10 pips?) still sounds very good.

You are seeing the excat problem that is occuring all the time. First there is absolutely no way to even make an estimated guess of the pips. Any figure would be a total guess based on no history of actual trades constantly. The sytem is not mechanical is involves too many unkown factors and decisions left to the trader to make individual trade decisions. You are dealing with a pipe dream that works in certain criteria of examples. Be careful, on the other hand it probably is has good of concept you will find using any indicator to trade with. Good luck... Let me tell you this if it could anyway near 100 pips per day everyday it would be worth millions of dollars. This is no system or indicator or concept that can produce winning trades day in and day out. The fact is simple there is no "HOLY Grail" when it comes to trading. That does not mean you can not be a successfully trader but you need to learn what price action is all about then apply a few good techniques but forgot thinking about indicators of any type will do that for you, it takes years of research and ton's of money to learn to trade successfully.

a777,

Have you ever tried a new program and made a killing? I hope so but I never have. I always had to tweek it here and there and dig for tips using that program. My experience anyway.

Remember in the post #198 for the new possible Stoch settings on the one munite chart...said I was tinkering only with some new numbers.

I apologize if you took it as a solid signals to trade. When I throw my thoughts outload, it's for the forum members to take a look at and maybe tinker with it to fit their style, if they are interested. At a quick glance it looked pretty good for those who specialise in one minute trading. See if you can change the numbers to fit you better.

I went back to post #198 and looked at what your talking about. Good eyes and comments.

A few posts back I mentioned if the first candle is large in a new direction...and if it starts to pulls back more than a couple pips... many times I'll exit the trade to save the pips. Re-evaluate what I see on the screen, including indicators and probably re-enter the trade which I do most of the time. As I've said many times... we need a broker with low spreads to trade this progam or any other. I use FXDD. 2 Pips on EUR/USD.

As to the point of the candle coming back on you: If I can save 4-8 pips getting out early... and only spend 2 pips to re-enter... I'd do that all day long. Like the Guy on the corner giving away $20 dollar bills for every $10 bucks I give him. It's extra work but I get paid every time I do it.

Like I posted the other day, my stop loss is usually 2 candles back or a little more.. To me it wouldn't matter if it it was 20 or 30 pips. It's only for an emergency for any unseen spike as far as I'm concerned. I like to exit where I want to, when I want too. That's what I do. I don't know what is politically correct but it works to make me pips.

On such a low time frame, mentally I like to visually trade each single candle like that is all there was to that trade...just that one candle until the next one appears.

Most traders on this time frame are happy to make 5-8 pips profit. I like to make more so have adjusted my style to fit what I EXPECT.

Last night while writing a reply to forex harry, I saw the candle break the upper bollinger band and go up about 25 candles. Somebody made lots of pips on it. I wasn't in the market at that time.

I TELL YOU UP FRONT.. when I trade I'm mentally in it 100%. I use all the little tricks I've learned in trading to save all the pips I can (like fast exit and possible re-entry on the low 5 min. time frame). WHEN i'M TIRED i DON'T TRADE, because I'll end up giving money to the broker.

There isn't one program out of the box that works like it does for the person who put it together. You have to make minor tweeks and bends to make it work for you...and pick their brain to find out any little secrets which weren't initally mentioned.

Thanks a777. Big E

1 of 3

Wow forex harry. May I call you Harry to be politically correct? What an attack. One of the best ones I've read in a long time. Must of had your track shoes on... no pun intended.

I felt like you portrayed me as a Hick from the deep woods who never wore shoes... only coveralls. How dare he even consider a program like this. And demo accounts... surely the devil has got him.

In response I WROTE A LITTLE STORY TO GO ALONG WITH YOUR THEME:

Ya know, first thing this mornin' when I woke up, I had to scratch and throw the varments out of my straw bed. I just had to have a cup of coffee. I asked the wife to use the grounds from last monday... heck they ought to be good yet. I've only used them three other times. Fresh as new pert near.

Put on my overalls and went to the front door cause I heard a noise out front over night and I ain't gettin' out of a warm bed to check it out. Low and behold... someone dumped a big pile of something on my front porch. I scratched my head and wondered what feller did that.

Anyway, after clearing a way thru all the junk I made a path to the barn. Got up in the hay loft to spread hay to feed the animals below. My pitchfork hit something and it fell out of the window all the way to the ground with a terrible noise when it hit.

I hitched up ole Bessie and started to walk to the front of the house when I saw that dern thing on the ground. I dern near forgot all about it. I just put it in the dang saddle bags and tied Bessie up to the front of the house.

The wife had breakfast on... ham, eggs, toast and rockey mountain oysters... ummm, my favorite. Well, I got up, gave the wife a little peck and squeeze and went out the front door.

I told Bessie (the horse)when she asked... Girl were going into Dodge. Ya know we talk all the time.

Well anyway, on the way into town we stopped to rest. I get plum tuckered on them long two mile rides. I looked at that dern thing that fell out of the loft. Finally figured how to open it... golly be... there were these funny lookin" Big Christmas candles and a yeller line that reminded me of fruit. Must be somethin' fan dangle new from the old Sears catalog. We keep ours stored in the outhouse. Can read it while your workin and... well you know. And dern the candles had wicks on both ends... can you imagine. And look below there at them funny lines that go up and down... up and down. Makes a feller dizzy.

Well, when we got to town we went to Miss Kittys and got a dern table in the back by the door. This puter thing had some kind of a cord. All I could figure was it must run on methane...so I turned ole Bessie around and plugged it in on her south side. She didn't much like it. The smell was fierce and made my eyes water.

That dern thing lite up again. I knew there was a reason I waited for 4th grade before I quit school. All that good learnin'.

You know Bad Bart don't you? He's the Blacksmith down the street. I told him to fire up his forge. When I shot in the air once I want ta go up. When I shot two times I wanted to go south... I mean down. Folks from around these parts would understand south.

You know... comin' into town today Bessie told me her grand, grand pappy and grand,grand mammy come here a long, long, long time ago. She said they got on a boat with a lot of othert animals. Then it started to rain, rain, rain so they closed the door. Shoot they floated pert near forever and ever she said. By that time Bessies grand, grand mammy had turned grey. She would get so mad when the other animals would sing... "the old grey mare she ain't what she use to be." I think it's kinda catchy myself. Anyway, Bessie was tellin me she was from a good blood line and didn't want to become hamburger at the end of her days. I said how about cat chow? She said something under her breath but I couldn't hear it..

Now Bad Bart Brags he is the only broker black smith for miles around.I think he's happy to help. Only charges me one beer per trade

You know, one day walking down here I stopped at the newspaper shop and talked to Bad Barts brother... Little Bart. Dang. The newspaper on the front page had a beautiful picture. I asked Little Bart "what is it". It said USS Enterprise on the front. He thought it was one of them new fangle duce and a halfs. Said I'd like to get one of them to clean out the barn and my front porch... he said... it 'ill do the job. Boy, that would surprise the wife.

Back to calf brandin'... oh I mean pootering. A FELLER LAST WEEK WANTED TO BUY MY PUTER. I said no because it has funny candles on it with wavey lines and makes me beer money to buy a round for the boys ever day at Miss Kittys. Really more money than that but I don't tell anyone sept Bessie.

Bad Bart keeps yellin' out his front door 7, 23 , -5, 76. Heck I don't know what it means. Somethin' good I guess
cause the Pony Express keeps bringing me money...

Marshal Dillion come in every now and then and puts the squeeze on Miss Kitty. And then a littlt peck.

Chester wanted to play with the puter one day but I said no. Magic candles require magic fingers. Besides I had all that learnin' up to 4th grade.

You know why Chester limps. Darn... got run over on the sidewalk by one of them fancy duce and a halfs. Said it flew away. Must a hit him on the head first. Poor feller. I wander if it's the same feller that left all that junk on my front porch? Hummm

My throats gettin' parched tellin' this here story. Got to drink some cool water for a minute. Better than hot milk!

Oh look, them three blue lines that run thru the candles, that dern candle keeps going up on that line for ever and ever. What's it mean? Better check my horoscope.

No big thing... I was just maklin' more money she said... ain't this fun?

I never tell the fellers at Miss Kittys how to spend their money. It's theirs and none of my business. Well, that's Bessies advice.

I'm gettin' real good at them lines going up and down, up and down. I still get dizzy sometimes.

All the fellers at Miss Kitty tell me it won't work watchin' those lines... But Doc said not to listen to them other fellas. He said if I keep practicin' on I'll figure it out better each and every day.. Heck, Doc went to grade 6... he ought to know best.

I call my puter Lu Lu Belle. I just tell the fellas she talks to me in a funny language.

Well, Bessie wants to get home.

Red Trader thanks for the space to clean up that mess on my front porch.

Harry... Tomorrow, High Noon, O.K.Corral... bring your cordless mouse.

Big E Post 1 of 3 to Harry.

As a professional don't discourage others trying to wrap it, adjust it to fit their style of trading and their knowledge of the forex trading trying to learn like you did many years ago.

On a 5 minute chart this is not the kind of program where you put your entry and take profit targets in your order ticket. You know that.

JD the other day modified it and only took trades when there were two candles above or below the yellow line and when the line crossed at the 50% line up or down. He said he won 9 out of 10 trades.

Some days it's called trading instead of winning. Fishing instead of catching... It's all the same. Just because I didn't pick the the right action on a particular chart that day and lost some money doesn't make either one of us a BAD trader. Most honest mentors are recommending you sit on the side lines until this dust settles... but as traders we think we know better (than our teacher who we're paying to keep us out of trouble) and don't listen and jump in. THEN IF WE HAVE A LOSS... we want to point the old finger and blame someone or something for the loss... Traders psychology 101.

Harry, I'm sure your a nice guy. I don't know anything about you or your trading experience in forex. In fact it's none of my business.

In the future I hope when your looking at other programs in the forums. Try it if you want, try it on for size, ask questions, tweek it to fit your personality and trading style. But don't dump on it if it doesn't fit you. It's not fair to the messenger or other people using the thread.

I wish you many pips. BIG E

PS - Don't forget your cordless mouse.

my, my
that's a new style of conflict resolution that I've never tried before:

"the story method"

best to both of ya'll

back to business

Red,
Have you noticed that when the Stoch lines are in the zone above 90 and below 10 and they cross that this is most often a very bad time to take a trade. It seems that the only possible time to take a trade in this danger zone it when the Stoch makes a sharp elbow turn rather than a nice smooth curve back into the field of play.

Of course, these observations do not apply 100% of the time because in 4x there are always exceptions. It is just something I have concluded about the 90 - 10 area after many months.

I usually try to enter at a cross of the Stoch lines outside the "danger zone."

What say you?

use Stoch for 1H 6,2,3

Big E, thanks for the tips that you offer and I fully understand it needs personal tweaking. I realize trading is an art and not a science. I just thought if I could find a way to reduce the losing trades I could naturally increase the overall profitability. Sometimes by focusing on ways to avoid the losing trades it makes everything feel extremely frustrating when unable to find a consistent solution/filter. Maybe I should focus more on identifying price action periods when the stochs do well. Like many I am just trying to find/develop a system that can deliver the consistent pips. Personally I like the 1M TF because of the smaller SL required. Big E you have kindly done your best to share your ideas and I appreciate your effort.

Harry, you seem to be experienced according to your tagline so why not offer some specific suggestions to help improve this strategy? I know you cannot condense years of experience into a few paragraphs but certainly with your knowledge you could come up with a few original ideas that could help further refine this stoch strategy.

I was excited when I stumbled across this thread on Stochastics and found RedTrader's helpful pdf and then your posts on the 2 stochs method. I had discovered the rudiments of the method myself using 5,3,3 and 21,3,3 and was using it trading 1' & 5' GBPJPY live with MT4 at FXCM.

You've taken it much further than I had progressed on my own and I've found your insights very valuable. Your clear explanations of the basics and the nuances is very refreshing from most forum posts I've read the past few years. Much appreciated.

Your posts have enhanced my learning and I've become more confident and consistent with the method as a result. Today only had time for 5 live trades but profited 126 pips with no losers. Longest trade was 7'.

I agree with your advice to forexharry. Hopefully he was just trying to point out the difference between demo trading and live trading but his attack didn't serve anyone well.

Forexharry, with your stated experience, you should be able to add something useful from which we could all benefit. Give it a try.



Couple of questions:


1- Some of your screen shots show the ADR indicator. I've watched the demo at CompassFx but how are you using it? Does it offer you anything useful in a 1' - 15' TF trade?


2- Could you expand on how you use the offset 5EMA? Are you using it as a firm filter or ???

Again, many thanks for your time, knowledge and effort to help others.
JR

I think thread participants might find this useful.

Hi all!

Well I've put myself in contact with the last things that happened here. One of the ideas that Harry promoted - posting live trades and not history - would have been good if this thread was in the "interactive trading" section and that because here the accent is put on - as I said many times - experience sharing and this sharing cannot be made without examples, and a good example it's one in witch you can see as much as possible - a history chart. It's not useful to post 2 charts: the first with "I've just opened the trade" and the second with "look what happened".

But with the demo vs. real mini lot trading idea I agree in most part with Harry and i say in most part because if you enter in the 4x world (trendy idea Kuduzu ) without any experience on markets, you should experiment on a demo and only after you got the idea of what it's going on and what you should do, it's indeed recommended to shift to a live account (with mini lots).

I'm glad that this conflict was managed in a polite way. 10x Big E

Now... regarding stochastics

I used to have beside levels 20, 30, 50, 70 and 80 a plus of 10 and 90. I observed that if the stoch pulls on the 10/90 level you can interpret that as a buy/sell signal but only in 50% cases... that's why I put them aside and trust the cc. Those 10/90 signals can transform in knots and that is why - as you say - it's not a good idea to trade according to those signals.

10x 4 the setting

He wont escape the tests

I'm happy to see that this thread it's achieving it's goal .

the post of #219 is one of the best posts here. He truelly analysed how it is. Although if u develop what you call your system and follow it, u many not run into truoble.

Remember that a well develop system will give you a good early entry, good early exit E.T.C

Now Redtradder have made some good research and have comeout with a good system, its left to some to use it and develop themselves with that. if you wish to trade 1min chart just hold on, and compiling the best method to do that, it has really been working.
Hust hold on.

well to my fellow traders, stick to your plan, be patient dont over trade in a day.

Pips revelead

The best way to trade this strategy is to combine it with technical analysis, to know when there is a trend. Ordinarily, one can trade around key resistance and support areas after EMA5 has Crossed EMA 10, which signals a strong move towards the next point of resistance or support as the case maybe.

I think this thread should take a new turn to discover ways or knowing when there is a trend. I use technical analysis from free services that send these to my email twice a day and I trade around these areas. If there is a trend, stochastics will give you 90% right trades and you can always get in and out.

This is a very good thread and we all will make it work. If you feel you have a better way of knowing when a trend is in place, share with all. Kudos to Big E. Thought I was good at prose. You beat me to it!!

Green pips to all.

Hey Guys,

Some good ideas presented here over the last several posts. With everyone pitching in I know we can get this thing wired down so we can all profit. I'm certainly open to any and all constructive ideas and would be more than willing to Demo trade new number sets like above.

Where any of you guys on the Webinar last night with Steve Nison? For those that don't know about him he is the #1 man in America and many places in the world who teaches about trading using candle charts and individual candles. He has got lots of books and I'd love to attend one of his seminars. Check out Amazon.com. Said you would learn more with his CD's than from just reading his books.

Anyway, back to the point. Someone asked him what indicators he uses when he trades. He said Stochastics and Bollinger Bands. Thought it was interesting and in line with our thread here. Just wanted to share that.

I'm going to try some of the settings that were mentioned above and see how they work for me and report back. I hope others will do the same.

Win lots of pips everyone, God only knows you deserve them for all your blood, sweat and tears... not counting the lost sleep.

Just remember: High Noon, O.K.Corral, Bring your mouse.

Big E



A

A completely turn will not be welcomed... the thread it's oriented on stochastic, and trends alone don't fit in the title, but - being about stochs - I think it would be good some kind of combination between 1) trend concepts and 2) the relation of those concepts with stoch (maybe even a method of using stoch as a trend following indi - different from the "waiting moments" from S7). Of course any new ideas are welcomed to discussion .

Well, are both very popular and useful indicators

JR,

ADR Calculator. Cost $50. Would I buy it again ? In a heartbeat. Best used on time frames of 15 min and up. An invaluable trading tool.

It will show you the current high and low for the day, Support and Resistance areas, Pip range per day, week, monthly and 180 days. You can look at it and tell what kind of range has been normal, if that pair is about worn out for that day, etc.

You can choose to see the range for 1-5 days, depending upon what timeframe you like to trade in. It updates tick by tick so your always up to date, second by second.

I'm sure there are other perks I have not discovered yet. I hope on that same post you all signed up for the free nightly video. Teaches you a lot about trading this market and he discusses current charts and always includes the EUR/USD and others. Gotta love it.

5 EMA. Several monthis ago I read a post in Forex Factory. The guys name is Vantage. He trades naked...using no indicators but the 5 EMA. Basically trading when the candle goes above or below the EMA line by two candles. Of course he uses trend lines and Support and Resistance too. Just his style of trading. He is from South Africa. Nice guy I emailed him back and forth a couple of times.

I'm going to try the suggested 5 and 10 ema from above and see how that fits my trading style. I'll let all know how it worked for me.

Hope that answers your questions. Big E

Hi guys,

The other day I said when there is a long candle I get out of the trade if the candle drops back 2 pips when I think it is at maximum. Of course I'm not always right. I re-enter if it looks safe to me on the next candle... I can afford to do that because my spread on FXDD is only 2 pips. Look how much money could have been made on the candles marked. Just an idea that works for me. Big E

i think this strategy can make 100+ pip on gj...this is superb..