Spudfyre's Stochastic 5 Minute Trade

Looking at those screens I can see :

- M5 over 90% (possible short)
- M15 climbing up
- M30 climbing up
- H1 turned up and climb
- H4 slightly down

for me is a no signal, only H4 is going down.

Correct.

This is a live shot of EUR/USD. Is this a good time to enter a long trade?

Mmm I would wait for M5 to go below 10% while all other TF still going up

Thx

I concur.

this is a buy long - when the stoch is breaching the 90 line it most often means a continuance in the same direction - for a little while anyway since the bias is short overall.

My guess. This example showed very clearly the lower TF (5mins) is pulling up the higher TF (15, 30, 1H, 4H). The 15 min stoch is a bit too high to enter long, otherwise a good set up for escalator play.

Great analysis by everyone on the last charts. I'm going to leave this thread after I post some more charts and some discussion. This is beacause I'm entering the lead into "Predictive MTF STochastics" as a new thread.

The one element of this thread besides making a few pips is that we can use the M5 to predict what out future long term trades will be and where we are in those trades....and where our trade is going.

Of course this is not simple to see without knowing what to look for and having a trigger. What I have gone through here is or trigger..M5<10%K and M5>90%K Stochastic levels.

Now we need to look at the BIG picture to see where the price is headed using this simple trigger.

Below is a diagram of 4 charts from July 24, 2008. The top left corner is our 1st chart, the top right corner our 2nd chart, the bottom left corner our 3rd chart and the bottom right corner our 4th chart.

Let us pretend for a minute that chart 1 is live. I have shifted all the Stochastics to reflect their proper position to the candles for the various time frames. Reviewing the past we can see that our H1 and H4 stochastics have been decreasing and it looks like we may be starting to build upwards with M5,M15 and M30. Even H1 is showing some upward movement. However, our current M5 is >90%K and that means a trigger to go short. This would be a bad time to go short, given all the other data we have, so we ignore this trigger.

Chart 2 hows us the trigger was right. Price dropped and we missed it. We can also see that M15 took a turn downwards. This would indicate to us early on that M5 is starting to build downwards. Our trigger on M5 is now at <10%K and this is a long entry. This conflicts with our M15 movement and again we stay out of this trade.

Chart 3 continues with M5 staying in the <10%K. That has continued the drop in M15 and we are still showing signs that our price will drop. As such we ignore our M5 trigger to go long and keep watching.

Chart 4 is our confirmation to an upcoming downward price movement. M5 is now at the >90%K area; M15 and M30 have both been built into downward turns, H1 is flat. H4 is telling us that this won't be a long term downward price movement as we expect that H4 will want to move upwards again. However, for catching 10 pips, this is a good time to enter and go short.

Our MTF STochastic trading experience will tell us that that we are probably going to see M5,M15, and probably M30 drop before H1 and H4 rally to start their Escalator to PIP ride upwards. Our trigger is the M5 to go short and we see M15 and M30 support that decision.

This is what I mean by Predictive MTF STochastic Trading. We know that M5 will go down and up between 100 and 0 many times. If H4 is to rise, M5 is going to have to build that rise. M5 is at the top of it's range...it will have to come down and with it will follow M15 and M30. The 3 charts previous indicated that we are moving down, the 4th chart proved it, M5 went up and everything else stayed down...price barely moved up. The current M5 price moves are down and the next downward M5 move to <10%K will likely give us an easy 10 pip short trade gain.

The next 4 charts continue on from the previous 4 charts. They are laid out the same way a previously and number charts 5,6,7,8.

We are already in our short trade and M5 did a bounce in Chart 5. M15 and M30 don't tell us too much new but everything is good. The bounce had no real effect on price.

Chart 6 shows us M15 rising a tiny bit and here we need to look at price. Again our price is flat so this rise needs to be watched closely but ignored at this point.

Chart 7 and we are bouncing some more. Here we see M15 and M30 rise a little. Look at all 3 peaks of M5 >90% K and our price. M15 and M30 are rising because M5 is bouncing in the >90% K range but again, price is not rising much.

Chart 8 is the move we expected. M5 dropped, price dropped and we grabbed 10 pips. A great trade! We still wouldn't trade this new M5 trigger long...we'd let M5 move along and wait until we see another great setup for anpther 10 pips.

This is how we use M5 as a trigger. It isn't that we always trade when M5>90 or <10 %K. We trade it when we have the signal and grab our 5-10 pips.

This is where this thread ends. I used it to demonstarte the M5 trigger and in itself is a viable way to trade. However, I want to know take what I have demonstarted here and move to a new thread on Predictive Multi-Time Frame Stochastic Trading.

There will be much more discsussion using this M5 trigger in that thread and ways to identify when to stay in a trade to grab maximimum pips.

now it makes much more sense to me
thank you

Great explanation Spud ! Thx

I concur with the previous 2 posts. This makes a lot of sense. Great job!

though charts in posts describe the main principle, but they not clear, which makes difficult (if possible) to reed it (to analyze)
guys, who can show and comment 5 min Sto10/90 trigger in conventional way (charts, more visible) please?
few indis - in case who havn't under hand
thank you

Sorry bumping this from the dead, I ran into it while looking for good stochastic settings. Was this a failure? People just stopped posting and i noticed spud is long gone from the forums. Anyone still use this method?