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Spud's Predictive MTF Stochastics

  • #501
  • Nov 15, 2008 6:48am Nov 15, 2008 6:48am
Quoting Spudfyre
You can do the same thing with M5 to D1. Just use M5 like I use M1 here and M15 and M30 like I use M5 and M15.

You'll find M1 tightens the trades....using longer periods keeps you in the trends more. If you like to stay and play the trends use the larger time frames as your references. If you are a scalper use the M1. This doesn't mean that using M1 will lead you to scalp it just means you can. M1 will certainly optimize any trade but if it confuses you, just drop it and use M5.
I can see where using M1 will reduce the DD. The only thing I'm wrapping my head around now is entering a trade when M1/M5 are down but M15 is still up.
  • #502
  • Nov 15, 2008 7:19am Nov 15, 2008 7:19am
30 mins later.....decision time

Our expected move for M1 is up to 100..that's where we are head. The question is will an M1 move to 100 change price up..or is this just going to be a small reversal in a long down trend?

You will notice that M1 is still above M5 and that was from M5 crossing below M1...not M1 crossing above M5. If we were using the M5 trigger this is an invalid long because M15 is still headed down.

We could play elasticity and expect M1 and M5 to rise towards M15....but with M30 so low, elasticity is very weak and will be very quick. So that isn't a good reason to go long.

Escalator long? Not with M15 so high.

So really we have no long reasons to go long so might as well stay short, or exit because we have to exclusive eveidence to go short either. There is going to likely be some retracement here, it stands to reason the M1 and M5 will rise to continue to push down M15 and M30.
Short term we expect to see price rise moderately...you might even throw in a Fib indicator to see what that retracement might look like. You could weigh here to jump out of the short, wait for the retracement to end and then jump back into the short....or you can just ride it out. Odds are we will not retrace too much...maybe 50% and it won't affect our stop. So long trenders stay in. Scalpers jump out...don't go long.

Eventually we'll get a short entry again..and this entire process will repeat. Or we might get a true long entry in which case our trade will change.

I'm hoping you can see more clearly how the stochastics interact using these charts and how you can use them to make decisions within your trade and where you are in that trade.

I will add more examples if you think this helps you.
Attached Image
  • #503
  • Nov 15, 2008 7:29am Nov 15, 2008 7:29am
Quoting jdcompute
I can see where using M1 will reduce the DD. The only thing I'm wrapping my head around now is entering a trade when M1/M5 are down but M15 is still up.
I wouldn't simply enter a trade because M1 and M5 are low and M15 high. IF M1 and M5 stay in an oversold condition this would be deadly as M15 would continue to fall.

You would need the M1 to have peaked at 0% and M5 already moving up towards M5 or M1 crossing M5 upwards as strong long signals. M5 leading M1 can cause a bounce down before M5 ever reaches M15.

It is a far better to wait and trade the short, where M1 and M5 hit the top, and then set up for a short entry where M15 is a little lower or in the overbought area. In otherwords, a nice setup for an escalator down or being in a down escalator is always the better trade than chasing the elasticity trades which can bite you.
  • #504
  • Nov 15, 2008 7:45am Nov 15, 2008 7:45am
Understood and thanks! By the way, where do you live? The USA?

Quoting Spudfyre
I wouldn't simply enter a trade because M1 and M5 are low and M15 high. IF M1 and M5 stay in an oversold condition this would be deadly as M15 would continue to fall.

You would need the M1 to have peaked at 0% and M5 already moving up towards M5 or M1 crossing M5 upwards as strong long signals. M5 leading M1 can cause a bounce down before M5 ever reaches M15.

It is a far better to wait and trade the short, where M1 and M5 hit the top, and then set up for a short entry where M15 is a little lower or in the overbought area. In otherwords, a nice...
  • #505
  • Nov 15, 2008 8:16am Nov 15, 2008 8:16am
Quoting jdcompute
Understood and thanks! By the way, where do you live? The USA?
Canada
  • #506
  • Nov 15, 2008 8:25am Nov 15, 2008 8:25am
Quoting Spudfyre
Canada
I'm from Texas but travel the states and to Canada a lot on business. In fact, I was in Toronto and London, Ontario this week...starting to get cold up there already
  • #507
  • Nov 15, 2008 9:24am Nov 15, 2008 9:24am
Spud, I'm curious what your thoughts are on the following:

ADX, RSI, Willams %, MACD

I know that you use only stochs in trading and to be honest with you, I'm really amazed at how you've shown us that we can trade succesfully day and day out using only one indicator. In fact I can't understand why people say that indicators are useless..obviously they haven't put in the time necessary to become efficient at using them. But anyway, your thoughts on the above indicators please
  • #508
  • Nov 15, 2008 3:17pm Nov 15, 2008 3:17pm
can we use 4h as a pivot point line instead of daily?
  • #509
  • Nov 15, 2008 3:32pm Nov 15, 2008 3:32pm
I modified AllStochastic indicator to show automatically lines starting from M1,M5,M15 to D1 so that it would be more easy to follow on chart latest Spud's teaching
Attached Image (click to enlarge)
Click to Enlarge Name: All Stochastic v1.2.jpg Size: 43 KB
Attached File(s)
File Type: ex4 All Stochastic v1.2.ex4   10 KB | 734 downloads
  • #510
  • Nov 15, 2008 3:53pm Nov 15, 2008 3:53pm
thank you a lot skyline for the indicator its really helpfull

can you modify the attached indicator to show only the last closed bar not the last active one? i think this will help a lot understanding the big picture
Attached File(s)
File Type: ex4 STOCH_Bars_M#_v2.ex4   36 KB | 358 downloads
  • #511
  • Nov 15, 2008 3:57pm Nov 15, 2008 3:57pm
when i opened te indicator the metatrader gave me a message (critical error) and automaticly shut down !!!!
anyone has the same problem?
  • #512
  • Nov 15, 2008 4:15pm Nov 15, 2008 4:15pm
Quoting sarah2002
when i opened te indicator the metatrader gave me a message (critical error) and automaticly shut down !!!!
anyone has the same problem?
I have the same problem on metatrader version 4.00 Build 217 but it works fine on version4.00 Build 220.
  • #513
  • Nov 15, 2008 6:51pm Nov 15, 2008 6:51pm
Quoting sarah2002
can we use 4h as a pivot point line instead of daily?
Yes. It will move more. I suggest M1 - D only to show everything. You should use at least 4 with the longest as your pivot. Ceratinly something to play with.
  • #514
  • Nov 15, 2008 6:59pm Nov 15, 2008 6:59pm
Quoting Spudfyre
Yes. It will move more. I suggest M1 - D only to show everything. You should use at least 4 with the longest as your pivot. Ceratinly something to play with.
Spud can you just expound a little more on what exactly is a "pivot" in this context? Is it a point where we look for a change of trend like in a Pivot point that we would normally use? I understand the concept of using M1 but the pivot thing is throwing me.
  • #515
  • Nov 15, 2008 6:59pm Nov 15, 2008 6:59pm
Quoting jdcompute
Spud, I'm curious what your thoughts are on the following:

ADX, RSI, Willams %, MACD

I know that you use only stochs in trading and to be honest with you, I'm really amazed at how you've shown us that we can trade succesfully day and day out using only one indicator. In fact I can't understand why people say that indicators are useless..obviously they haven't put in the time necessary to become efficient at using them. But anyway, your thoughts on the above indicators please
RSI and Williams % are very similar to Stochastics. ADX is a partner indicator in my mind and used best within a system of indicators. I love MACD, I started with MACD. For a newbie trader MACD is I think the best choice to learn how Forex works and how it bites you. You could probably adopt much of what I have written about Stochastics and adapt it to RSI amd Williams %. I just find Stochastics that tiny bit more honest. I don't think MACD can be traded on it's own (please prove me wrong), but it is a great tool on any traders charts.
  • #516
  • Nov 15, 2008 7:10pm Nov 15, 2008 7:10pm
Quoting Spudfyre
In efforts to simplify entry I believe if a gifted indicator programmer could develop something similar as described below, it may significantly help your trades.

What is required is an alert when the current M5 stochastic closes above the last closed M15 stochastic or below the last closed M15 stochastic. The prerequisite is that for an M5 close above the M15, the M5 had to be lower than the M15 stochastic. Vice versa the other way.

When the M5 closes above we want to track it until price has gained 10 pips. (we'd like the 10 pips to be variable)....
Here's what I have so far.

Currently this can ONLY be attached to the 5 minute chart. It will draw the 5M stochastic main line and plot out 15M stochastic in little "x"s. Green and Red arrows are also drawn to mark out the valid crosses.

Remember this only works on 5M charts. I'm working on allowing it to be multi timeframe supported. But that's gonna take a while.

Audio alert will only sound ONCE after a confirmed cross has occurred. meaning the candle has closed like how Spudfyer wanted.

I don't quite understand the "When the M5 closes above we want to track it until price has gained 10 pips. " portion... Logic wise it's possible to track price on the background, but I don't think it can be shown on the indicator window for the previous crosses since they're already over...

Let me know if there's any bugs to fix.

regards,
Zen
Attached File(s)
File Type: ex4 Stochastic_5M+15M.ex4   7 KB | 530 downloads
File Type: mq4 Stochastic_5M+15M.mq4   8 KB | 680 downloads
Programming for a better future.
  • #517
  • Edited 8:23pm Nov 15, 2008 7:34pm | Edited 8:23pm
Here ya go Sarah

This is the PDF pt. 3 of the thread so far of Spuds posts.

Cheers
Attached File(s)
File Type: pdf Spudfyers Predictive Stochs Pt. 3.pdf   780 KB | 1,278 downloads
Time hides Nothing
  • #518
  • Nov 15, 2008 10:00pm Nov 15, 2008 10:00pm
Hey Spud thanks for your latest posts.

One thing though, is the 1m trigger of 0% and 100% the same sort of thing as the 5m above 90 below 10?
Time hides Nothing
  • #519
  • Nov 15, 2008 10:15pm Nov 15, 2008 10:15pm
Quoting Zen_Leow
Audio alert will only sound ONCE after a confirmed cross has occurred. meaning the candle has closed like how Spudfyer wanted.
Zen
Zen wonderful job with the indicator so far. Just looking at the crossovers now and you can clearly see the importance of the 15m being either up or down in the direction we wanna go. Great job
Time hides Nothing
  • #520
  • Nov 15, 2008 10:36pm Nov 15, 2008 10:36pm
Quoting CindyXXXX
Here ya go Sarah

This is the PDF pt. 3 of the thread so far of Spuds posts.

Cheers
thanks for putting these pdf together. I've done some of that for myself on some of Spud's earlier thread. It takes time so we thank you.
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