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Spud's Predictive MTF Stochastics

  • #21
  • Oct 26, 2008 8:30am Oct 26, 2008 8:30am
5 minutes later and this would be a compelling time to buy long. If your really the impatient type - this is the trap you must avoid. A good gamble yes, but it won't always work in your favour...tust me I'm about as impatient a trader as there is!
Take a good look at M15. Here is proof positive that stochastics don't lag. However, we have to keep ourselves in control. This is a sit back and wait moment to get the proof we need to enter the trade. The price move is the big hold back and we know things are going to change and go up..so why not wait for it.
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  • #22
  • Oct 26, 2008 8:38am Oct 26, 2008 8:38am
We finally hit our long entry at 22:00 (actually we enter at the close at 22:05). Notice we are entering after the trigger. We have waited for all the signals to come together.
See how M5 and M15 are moving up and price is too.
We waited and also have support from M30 and H1. As subtle as those upward moves are they are important. Consider that price in our M5 chart is all downhill from what we see and look at what M30 and H1 did over that entire period of downhill price movement...can you see that slight up curve.
Look back at M15...can you see an even longer up curve than my arrows show?
Remember it is what M5 is building that tells us where price is headed. Even though M5 price has been moving down, it has been building for an upward move. That M5 trigger is the pressure valve...it signalled the trade entry and we just waited to make sure.
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  • #23
  • Oct 26, 2008 8:46am Oct 26, 2008 8:46am
Spud , do you think it's possible to define some sort of defined rules based on your MTF Predictive Stochs to create an alert indicator ?
I was thinking to something like this :

Long signal :
1) M5 , K% < 10 and rising
2) M15 , K% > 20 and rising
3) M30 , K% > 20 and rising
4) H1 , K% > 20 and rising
5) H4, K% > 20 and rising

Short signal :
1) M5 , K% > 90 and decreasing
2) M15 , K% < 80 and decreasing
3) M30 , K% < 80 and decreasing
4) H1 , K% < 80 and decreasing
5) H4, K% < 80 and decreasing
  • #24
  • Oct 26, 2008 8:47am Oct 26, 2008 8:47am
And here is our trade. 50 Pips or there about.
We are taking the exit on the first M5 short trigger only because we are nearing the weekend close. I prefer not to hold trades over the weekend if possible.
Notice how easy it is to travel through this trade from entry to exit. At no point are you in doubt or stressed about your trade...no stops to worry about. Just a nice relaxing climb, the M5 short trigger goes off and exit the trade.
If this wasn't a weekend and the M30 was a little stronger I might have stayed in this trade and followed the same cues that got me into the trade to get me out. But that is for latter explanations.
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  • #25
  • Oct 26, 2008 8:47am Oct 26, 2008 8:47am
Bravo for this meticulous and well-explained trading methodology. 'A journey of a thousand miles, begins with a single STEP'! And that step is exactly your M5 chart, as M1 is too juvenile and frivolous to lend any serious thought to, and H1/H4 are the 'have-beens'. The M15/M30 watch the mood of M5 and accordingly comply, whereby allowing M5 to FINALLY trigger your awaited move which H1/H4 have to record as your new-found TREND!! Thanks again for your efforts and selfless endeavor to enrich others with the fruits of your hard work. God Bless.

Zaffar.
  • #26
  • Oct 26, 2008 8:55am Oct 26, 2008 8:55am
It won't be quite that simple. I'lll keep rambling on and you can see what are the factors are. I'll try to work out a more "logical" process but much of this is intuitive on my part. Hopwever, I'm sure there are logical parameters that can be used.


Quoting skyline
Spud , do you think it's possible to define some sort of defined rules based on your MTF Predictive Stochs to create an alert indicator ?
I was thinking to something like this :

Long signal :
1) M5 , K% < 10 and rising
2) M15 , K% > 20 and rising
3) M30 , K% > 20 and rising
4) H1 , K% > 20 and rising
5) H4, K% > 20 and rising

Short signal :
1) M5 , K% > 90 and decresing
2) M15 , K% < 80 and decresing
3) M30 , K% < 80 and decresing
4) H1 , K% < 80 and decresing
5) H4, K% < 80 and decresing
  • #27
  • Oct 26, 2008 9:02am Oct 26, 2008 9:02am
More well said writings. I'll mention that M1 could, might, probably may help in identifying changes much like the M5/M15 relationship. However to actually use M1 in a live trading scenerio would require a brain much faster than mine It may be interesting to play with M1 in an EA as I think it may trigger earlier entry.....but it may also trigger too early an entry and lead to many traps.

Quoting Zaffar
Bravo for this meticulous and well-explained trading methodology. 'A journey of a thousand miles, begins with a single STEP'! And that step is exactly your M5 chart, as M1 is too juvenile and frivolous to lend any serious thought to, and H1/H4 are the 'have-beens'. The M15/M30 watch the mood of M5 and accordingly comply, whereby allowing M5 to FINALLY trigger your awaited move which H1/H4 have to record as your new-found TREND!! Thanks again for your efforts and selfless endeavor to enrich others with the fruits of your hard work. God Bless.

Zaffar.
  • #28
  • Oct 26, 2008 9:36am Oct 26, 2008 9:36am
Quoting Spudfyre
More well said writings. I'll mention that M1 could, might, probably may help in identifying changes much like the M5/M15 relationship. However to actually use M1 in a live trading scenerio would require a brain much faster than mine It may be interesting to play with M1 in an EA as I think it may trigger earlier entry.....but it may also trigger too early an entry and lead to many traps.

I agree with you that we would have to be fast for a M1 entry and probably an EA would do the job better, but I recall a professional trader saying "those who seek bottoms, lose theirs". I for one prefer it your way for the trend to initiate properly on M5, and then go for it. Happy pipping.

Zaffar.
  • #29
  • Oct 26, 2008 9:58am Oct 26, 2008 9:58am
Quoting Spudfyre
It won't be quite that simple. I'lll keep rambling on and you can see what are the factors are. I'll try to work out a more \"logical\" process but much of this is intuitive on my part. Hopwever, I'm sure there are logical parameters that can be used.
Yes I see Spud, so just to start with something very simple , I'll code an alert whenever the M5 is going on extreme >90% or <10%
  • #30
  • Oct 26, 2008 10:30am Oct 26, 2008 10:30am
Here are a few parameters:

M5 trigger long or short (%K<10.0001 and > 89.9999)

Price turning off a trend, so long trigger would want price going up after price has been coming down...here's a toughy....how many M5 candles in the down trend..and how many now in the up trend

At M5 long trigger point is M15 %K up, for how long and how much,what is it's slope

That will really get you started (and keep you really busy)

Actually this might be a better list:

LONG TRADES

M5 < 10.0001% - simply triggers that we can make a long trade

At M5 trigger point:
Where are M15,M30,H1,H4 located in their ranges (overbought 80-100, high 65-80, middle 35-65, low 20-35, oversold 0-20)
How long have they been moving up/down/flat and what is their slope…consider flat +/- a slope that is not visible to the eye on the chart…maybe only +/- 1% K?
The slope would be a straight line from the point where the direction of the %K line changed overall direction
Is the last %K line pointed up or down, the last 2, last 3, etc. How many periods can we go back where %K is following same direction


Quoting skyline
Yes I see Spud, so just to start with something very simple , I'll code an alert whenever the M5 is going on extreme >90% or <10%
  • #31
  • Oct 26, 2008 11:13am Oct 26, 2008 11:13am
Quoting Spudfyre
Here are a few parameters:

M5 trigger long or short (%K<10.0001 and > 89.9999)

Price turning off a trend, so long trigger would want price going up after price has been coming down...here's a toughy....how many M5 candles in the down trend..and how many now in the up trend

At M5 long trigger point is M15 %K up, for how long and how much,what is it's slope

That will really get you started (and keep you really busy)

Actually this might be a better list:

LONG TRADES

M5 < 10.0001% - simply triggers that we can make a long trade

At M5 trigger point:
Where are M15,M30,H1,H4 located in their ranges (overbought 80-100, high 65-80, middle 35-65, low 20-35, oversold 0-20)
How long have they been moving up/down/flat and what is their slope…consider flat +/- a slope that is not visible to the eye on the chart…maybe only +/- 1% K?
The slope would be a straight line from the point where the direction of the %K line changed overall direction
Is the last %K line pointed up or down, the last 2, last 3, etc. How many periods can we go back where %K is following same direction
Thx Spud I'll take a look to code this
  • #32
  • Oct 26, 2008 11:14pm Oct 26, 2008 11:14pm
Great analysis..step by step. Great job Spud. Thanks.
  • #33
  • Edited Oct 27, 2008 6:52am Oct 26, 2008 11:33pm | Edited Oct 27, 2008 6:52am
Quoting jdcompute
Great analysis..step by step. Great job Spud. Thanks.
I second that. What a treat to have someone so experienced in this share their wisdom with others.

Facinating stuff

cheers Spud
Time hides Nothing
  • #34
  • Oct 27, 2008 9:00am Oct 27, 2008 9:00am
it is easy to forget and look at the last bar stoch.. when you have to look at the previous bar one... it would be nice an stoch line without the last bar stoch. because it is moving until the bar closes and it is not used.
  • #35
  • Oct 27, 2008 9:13am Oct 27, 2008 9:13am
Quoting emda
it is easy to forget and look at the last bar stoch.. when you have to look at the previous bar one... it would be nice an stoch line without the last bar stoch. because it is moving until the bar closes and it is not used.
Pls try this modified version..
Attached File(s)
File Type: mq4 Stochastic_NoLastBar.mq4   4 KB | 1,531 downloads
  • #36
  • Oct 27, 2008 9:23am Oct 27, 2008 9:23am
Quoting skyline
Pls try this modified version..
wow that was fast
thank you heh
  • #37
  • Oct 27, 2008 9:27am Oct 27, 2008 9:27am
Quoting emda
wow that was fast
thank you heh
You're welcome Emda ! It was fast because it's a minor change on the standard stochastic indicator
  • #38
  • Oct 27, 2008 10:22am Oct 27, 2008 10:22am
hi spud
i m looking at the trade yo have posted earlier and i dont see the stochastics on H4 is moving up ? it is important to have the h4 is moving up too right ?
regards
  • #39
  • Oct 27, 2008 10:26am Oct 27, 2008 10:26am
i meant in post 22 spud where u have said you took the trade . the 5 , 15 , 30 are pointing up
1h maybe just turning and h4 is still pointing down , could u please comment
regards
  • #40
  • Oct 27, 2008 1:41pm Oct 27, 2008 1:41pm
Remember that we are looking at the M5 building the M15, building the M30 and so on. H1 and H4 tell us where we are (were) in the broader view of the MTF stochastics. H1 can play a role if we see it support our recent M15 and M30 movements. You can see it in my examples but you have to look carefully. H4 is likely going to lag so far behind we will use it more to determine where we are and staying in the trade for a long period.

Also remember we are seeking trend change. If we are going long and H1 and H4 are > 90% K...we won't even bother entering that long trade....we might scalp the M5,M15 and M30 but we'd know we aren't staying there very long.

I'll be providing more examples and hopefully I can find one that demonstrates this better.

Quoting imad
i meant in post 22 spud where u have said you took the trade . the 5 , 15 , 30 are pointing up
1h maybe just turning and h4 is still pointing down , could u please comment
regards
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