Spud's Predictive MTF Stochastics

Thanks for the detailed post, it's helping me to see your 5M PMTFS system in action. I have my charts set up very similar to yours but am starting to think of actually taking the 4H out. I think it is throwing me off having it staring me in the face, and more times than not, it's contradicting the current trade. Your thoughts?

Thanks again and great posts!

J

I think I'm on the verge of my first spud trade.

5M stoch has been at or near 90 for awhile now, and that has caused the 15M, 30M and 1H to turn up or tick up. the 4H seems to stubbornly stay down, so I expect this to be a counter-trend trade.

I'm waiting for the 5M stoch to reach 10 and then turn up before I enter long.


Thoughts?

I took this trade at 1:05 GMT for a quick pain free 30 pips.

Here I go.

Comments?

Is price up on 5M?

For that bar: yes.

So.....how did it turn out?

29 pips. Profit, I need to work on the exit trigger.

Very nice.

Quote:
Originally Posted by skyline http://www.forexfactory.com/images/buttons/viewpost.gif
Spud did you have a chance to test the slight modified Stochastic version where latest bar is not painted ? Do you think it could be of some help in MTF Stochastic to avoid confusion mostly in live trading ?
http://www.forexfactory.com/showpost...7&postcount=35

Cheers,
Skyline


does it mean you taking into consideration only previous bars values ( 15, 30 min, 1H,4H ago)?

or what's the confusion?

i think that we need a programmer to help us writting an indicator that shows us the changing in the slope of the last bar +/- i think that will make things easier here is the explanation of spud

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

than as with ma slope, momentum, roc - it still would be subject of discussion and decision making - what level of change can be acceptable or not (though it could be possible to optimise for each currennsy)
actual change you can see by simply compering values in data window or on cursor point

A few things after reading the last few entries:

M5 price up or down is calculated from the trigger close to the entry close.
Note: There is a thing I call the "fish hook" that I promise to demonstrate this weekend.

Slope of %K does not matter. UP or DOWN from the ---- (horizons) is all that matters. It might be interesting to back test slope values over a long period but I doubt % slope will have much bearing.

Just like you need a valid trigger to enter, and an opposite valid trigger to exit....an invalid trigger in the trade direction "can" stop your trade. For example, if you have a valid Long trigger and enter ...then another Long trigger comes along and becomes invalid...most likely you should be exiting. However there are a few factors here at play over the MTF. I'll discuss these.

We don't want to go here into the land of "iffy" decision making. Follow th efirst 2 rules and they are 99% of the system. Slopes, ma, are just going to confuse your trades, not help make better trades.

Hi, anybody able to help me set up charts with the Stoch settings. I think I have a different version of MT4 and the indicator does not look right. Appreciate.

Buck,
here's a link that shows you how to set up MTF Stochs
http://www.forexfactory.com/showthread.php?t=37176

more here
http://www.forexfactory.com/showthread.php?t=31790

can you post a screen shot of what you have now and we can look at it to see what you need?

.

To perhaps simplify things, I'll demonstrate using only the looking at the first 2 rules and M5 and M15 only. I'll completely forget about looking at M30, H1 and H4 for now.
I've picked this trade to show you how this sytems catches an upward price move in what is a steady downward price move. Price moves down before and after our trade, but we "predict" almost exactly the upward price move.
This trade grabbed us anywhere from 8 to 30 pips depending on how we decided to exit. No matter what we MUST exit a long trade when we have a valid short entry produced.
Notice that when the M5 long trigger appears and soon after our first M15 move is down...it is only a bit but still down so we have to wait until our next M15 move ..and that is up..so we can mark our entry (M5 price is up from the trigger to M15 close that moved up).
We soon get 2 more M5 long triggers which are proven to be valid longs from M15 so we stay in our long trade.
Notice how M15 continually moves up during our trade and notice we only have long triggers during that period.
We finally get a M5 Short trigger (we actually have 2). You can see if you exit at the first M5 short trigger you will pocket about 20 PIPS. And if you exit at the 2nd M5 short trigger you pocket about 28 PIPS.
However, if you stay long because the M5 short has not yet been validated by M15...we hit our MUST EXIT point and take only 8 PIPS (less our spread).
We can exit at any time we are in profit...but we MUST EXIT when we hit an opposite trade validation entry. In otherwords if we are in a long trade and get a short entry signal then it is time to exit long and go short.

I had no trades on Friday due to the fact that price action seemed very erratic and unstable. Did anyone find this to be true?

Here was a nice quick 12 PIPS near end of day. This was only entered to grab a few quick PIPS but it worked out that we had an exit trigger pop in anyways to make the trade easy.
This took a while to enter and after the M5 Long trigger but waited until the M15 went up and looked at M5 price to make sure it was going up from our trigger to our entry.
Took the exit on the first M5 short trigger due to it being the end of the trading day. I was only aiming for 5-10 PIPS when this trade started.

The trade before.....again late in the day so I'm looking to exit on the first M5 trigger or on PIPS. Here I was aiming for 30 PIPS at the start but if I hadn't hit the exit trigger I would have started to reduce my PIP target as the week neared closing time...or exit on a short trigger.
We get an M5 Long trigger, wait for M15 to go up and make sure the price is up on M5....we meet all that and enter the long trade.
Ride the roller coaster and notice how again our exit trigger grabs a nice spike when the M5 short trigger appears.
That was 21 PIPS for me (27 PIPS was the max close to close less spread).
The dive at the beginning of this trade did stress me, but stuck to the rules and rode it out.

2 simple trades for 33 PIPS in a rough and tumble ranging market at end of day.