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Spudfyre's Stochastic 5 Minute Trade

  • #61
  • Oct 22, 2008 4:52am Oct 22, 2008 4:52am
Quoting Spudfyre
EST +7
Thanks
TTFN Merlyn
  • #62
  • Oct 22, 2008 4:53am Oct 22, 2008 4:53am
Quoting Spudfyre
Yes, keep in mind we are not entering trades just becasue we see a <10 or >90; we are following MTF Stochastics and triggering our 5 min trade based on our expectation that our 5 min chart will move in the way we expect our greater MTF time frames to move.
yes, im still on board with using MTF. I guess at this point I assume that all have that in hand, but of course it's good to repeat the foundational stuff.

Also, discussing things like 10/90 is helpful to get a handle on Stoch nuances.

thanks,
  • #63
  • Oct 22, 2008 5:06am Oct 22, 2008 5:06am
Spud,

do you wait for "K" in higher TF to leave the 20-80 area, as in your former strategies, or you want the "K" just move in your direction only? And in higher TF you use 5,3,3, or 14,3,3?

And do you aply all MTF stochs (15m,30m,1h,4h) or do you look on the 15min for confirmation only?
  • #64
  • Oct 22, 2008 5:33am Oct 22, 2008 5:33am
Great questions! We would always prefer our higher stochs to be leaving the 20/80 area...that certainly the safer way to trade. It would simply be a stronger case that our M5 is going to move and build our MTF Stochastics.
Certainly if M15,M30 and H1 are all inside the 20/80...your really going to have to accept that this would be a high risk trade.

Generally the M15 may be close to or around 20/80. There are many trades available where we can simply wait for MTF to develop by the rules and simply take advantage of M5 as one of our trades within MTF Stochastics.

You can't go wrong using all 4 time frames. They are just information to you and will filter out more trades the more you use, but generally you will make safer trades if you use more. I look to where H1 and H4 are in support...but my triggers are more aimed at getting support from M15 and M30.

This is a "building" trade. We are taking MTF to the start, where M5 is going to start to build the direction of movement of our higher time frames and M15 and M30 will be the first to react.



Quoting colombino
Spud,

do you wait for \"K\" in higher TF to leave the 20-80 area, as in your former strategies, or you want the \"K\" just move in your direction only? And in higher TF you use 5,3,3, or 14,3,3?

And do you aply all MTF stochs (15m,30m,1h,4h) or do you look on the 15min for confirmation only?
  • #65
  • Oct 22, 2008 5:43am Oct 22, 2008 5:43am
Quoting Spudfyre
They are coming.
Great as usual !
  • #66
  • Oct 22, 2008 6:09am Oct 22, 2008 6:09am
Spud,
thanks for reply.

And take a look on attached DoubleSmooth Stoch. I'm sure you already know this version of stoch. But with settings like 5stch/3ema it make much more smooth moves and in trends it reaches to the 10/90 area much more often. (the red line). So we have more trading opportunities.
Attached File(s)
File Type: mq4 DoubleSmothStoch Bressert.mq4   3 KB | 718 downloads
  • #67
  • Oct 22, 2008 5:59pm Oct 22, 2008 5:59pm
Below is an image of the charts used to trade Oct 9th as I decribed earlier. Remember that M5 is building the M15 and higher time frames...it is very important to think this way, even though your mind will want you to think we are following the higher time frames.
What happens from 20:00 to 20:50 on the M5 looks like an upward trend developing but this is not what is developing. What is happening is the M5 is pushing up and our %K on the H1 is moving down from 20:00 to 20:45. The M15 from 20:15 to 20:45 %K also moved down. In other words, even though our M5 is moving up, the M5 is building a downward trend in our higher time frames.
We exit at 10 pips and the entire journey is supported by a constant movement downwards in M15 and H1 stochastics. Even though our M5 price bounces along a bit at 21:15 we hit out 10 pip exit as the candle hits a low. The M30 also supports our trade but it is much harder to see it, but it is there.
Look more here at how the M5 movement affects the M15 and H1. In reality we are watching price movement weaken but it is extremely hard to see just looking at price...the stochastics show this weakening in price very clearly.
What is more interesting is this M5 building is the start of a "predictive" MTF Stochastic that leads to a 300 pip drop. This is the starting point of learning how to read and use Predictive MTF Stochastic Trading.
Attached Image
  • #68
  • Oct 22, 2008 8:41pm Oct 22, 2008 8:41pm
Thanks for coming back with this new thread, Spud.... You approach to teaching is much appreciated... Trading is not about a magic formula... rather, long term success is obtained after long and careful study. Your observations about price movement from a multiple time frame perspective is priceless.
  • #69
  • Oct 23, 2008 3:33am Oct 23, 2008 3:33am
forget about the threads in the chart.. it's only that I still use them..... two examples of stoch over 90 that worked fine here..

a question would be... wait until crosses back from 90... or until candle closes above 90 but below previous stoch value.. that is above 90 but pointing down.
Attached Image (click to enlarge)
Click to Enlarge Name: 23-10-2008 12-27-57.png Size: 48 KB
  • #70
  • Oct 23, 2008 3:47am Oct 23, 2008 3:47am
Quoting emda
forget about the threads in the chart.. it's only that I still use them..... two examples of stoch over 90 that worked fine here..

a question would be... wait until crosses back from 90... or until candle closes above 90 but below previous stoch value.. that is above 90 but pointing down.
Hello emda,

It looks as though you are still using 14-3-3 for your setting, or did you change them all to x-1-1?
TTFN Merlyn
  • #71
  • Oct 23, 2008 4:09am Oct 23, 2008 4:09am
Quoting Merlyn
Hello emda,

It looks as though you are still using 14-3-3 for your setting, or did you change them all to x-1-1?
oopsssss
you are right... forgot about this important detail... heh..
this is the corrected chart with slowing 1. much better.
Attached Image (click to enlarge)
Click to Enlarge Name: 23-10-2008 13-06-46.png Size: 56 KB
  • #72
  • Oct 23, 2008 4:26am Oct 23, 2008 4:26am
Quoting emda
oopsssss
you are right... forgot about this important detail... heh..
this is the corrected chart with slowing 1. much better.
Did the same thing myself initially
TTFN Merlyn
  • #73
  • Oct 23, 2008 8:41am Oct 23, 2008 8:41am
Quoting emda
oopsssss
you are right... forgot about this important detail... heh..
this is the corrected chart with slowing 1. much better.

it is my observation that when the 14 line taps the %0 or %100 that price will most likely continue in the same direction for a while. I try to wait till the Stoch line crosses back over the 90ish or 10ish area.

in at least 3 of the 4 trade signals on you chart price continued in the same direction before turning around. Of course, there are times when the Stoch line hits the 90/10 area wiggles around that area while price keeps moving.
  • #74
  • Oct 23, 2008 12:38pm Oct 23, 2008 12:38pm
Quoting Spudfyre
......
What happens from 20:00 to 20:50 on the M5 looks like an upward trend developing but this is not what is developing. What is happening is the M5 is pushing up and our %K on the H1 is moving down from 20:00 to 20:45. The M15 from 20:15 to 20:45 %K also moved down. In other words, even though our M5 is moving up, the M5 is building a downward trend in our higher time frames.
.....
.
Spud,

I'm not sure whether you read my last discussion in your MTFstochastics thread with JDcompute. If not, take a look there.
The problem here is, that the time values on horizontal axis are OPENING prices of the bars. NOT CLOSING prices! Take a look on charts, on any last unclosed bar.
So, your entry 5min candle at 20:50 is OPENING at 20:50 and closing at 20:55. And your H1 stochastick is not moving down from 20:00 to 20:45 but is peaking at 21:00 (closing time of 20:00 H1bar).

So your entry was at climbing up H1 stoch and climbing up M15 stoch (if you wait for closed bars).

This is important to understand, if we want to manualy bactest stochastic charts. If you disagree with me, take a look on charts and to the last two pages of your MTF thread, where I discussed this issue more closely, with exaples on charts.
  • #75
  • Oct 23, 2008 2:28pm Oct 23, 2008 2:28pm
Quoting colombino
Spud,

I'm not sure whether you read my last discussion in your MTFstochastics thread with JDcompute. If not, take a look there.
The problem here is, that the time values on horizontal axis are OPENING prices of the bars. NOT CLOSING prices! Take a look on charts, on any last unclosed bar.
So, your entry 5min candle at 20:50 is OPENING at 20:50 and closing at 20:55. And your H1 stochastick is not moving down from 20:00 to 20:45 but is peaking at 21:00 (closing time of 20:00 H1bar).

So your entry was at climbing up H1 stoch and climbing up M15 stoch (if you wait for closed bars).

This is important to understand, if we want to manualy bactest stochastic charts. If you disagree with me, take a look on charts and to the last two pages of your MTF thread, where I discussed this issue more closely, with exaples on charts.
Spud is aware of this. He had the same discussion on one of his earlier threads.

oo7_ts
  • #76
  • Oct 23, 2008 3:20pm Oct 23, 2008 3:20pm
Quoting oo7_ts
Spud is aware of this. He had the same discussion on one of his earlier threads.

oo7_ts
Yep, I think it was discussed in the original MTF Stochastic thread.
  • #77
  • Oct 23, 2008 5:23pm Oct 23, 2008 5:23pm
hi spud
the stochastics in higher tf ,15mn.30mn.1h .4h we use the normal settings or 14.1.1 as per 5 mn tf
thanks
  • #78
  • Oct 23, 2008 7:56pm Oct 23, 2008 7:56pm
Following are 3 charts following the M5 over 15 minutes of movement. The stochastics are corrected on the charts to properly represent the chart shifts. The M5 uses 14,1,1 and M15,M30,H1 and H4 use 14,3,3 as Stochastic settings. The M5 is on top, the M15 is below the M5, the M30 is on the bottom left, H1 bottom centre, H4 bottom right.

The M5 has reached a signal point >90 %K. Question in your mind is do we trade short on this signal?
Attached Image (click to enlarge)
Click to Enlarge Name: Oct 20 0345 to 0350.gif Size: 49 KB
  • #79
  • Oct 23, 2008 8:00pm Oct 23, 2008 8:00pm
Here is the next 15 minute move. We have another >90% K signal to buy short. Do we?
Attached Image (click to enlarge)
Click to Enlarge Name: Oct 20 0350 to 0355.gif Size: 49 KB
  • #80
  • Oct 23, 2008 8:02pm Oct 23, 2008 8:02pm
Ok, we get more information as all our charts update. If you bought short, what do you do now?
Attached Image (click to enlarge)
Click to Enlarge Name: Oct 20 0355 to 0400.gif Size: 49 KB
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