Spud's Predictive MTF Stochastics

How to scalp quick pips on a day like this ?

Looks like we may see a move down later...standby

2 PIPS at a time

Play the M1 and M5 elastic to the M15. Use M1 when it has peaked above 90 or below 10 and then crossed above 20 or below 80 (you can cheat a little, just don't get caught in over market). Trade with M5 direction..and of course M15 must be opposite and should be above 75 or below 25.

Grab 2-3 PIPS a trade....you can collect quite a pile in a day. Don't stay in too long...make your pips get out, in, out. If things bounce against you, 99/100 times you'll see it and just wait to break-even.

You can also go with M15 (M1,M5.M15) in same direction but only if M5 and M15 especially is above 80 or below 20. Again, do not want to catch an over market.

This is how I entertain myself on boring rangy days. Also a great time to watch the stochs and see how price reacts

You'll know things are going to start to trend soon if you see M1 high and low cycles start to take longer and longer to complete. Typically M1 cycles are quite quick in a range...like 5-10 minutes long...that's not cast in concrete...just something to watch for. Ohhhh and avoid trading this way around the news...last thing you want to be in is a 50 PIP dive for 2 pips.

lol thanks Spud - Great advice I was actually trying to work out how to play the elastic trade with the M1 great to hear it straight from the horses mouth!

Cheers

hi spud
what setting for the stochastics 14.3.3 or 5.33?
or 14.1.1 on the lower TF and others 14.3.3
thanks

by the way who is the broker that allow us this kind of scalping !!! and wont quote and requote

Trading that M1/M5 back to the M15 is cool!! I'd been sitting here wondering how to get something going. I'm picking up some good pips now.

Spud, based on this I'd expect the 5m/15m to trade back up to overbought and then fall with the 30m and 1h...

**Edit: I just grabbed +13 pips off this but I'm getting out since the 5 is low and the 15m is oversold. If I get a good trigger of the M1, I'm back in quick and out even quicker

Perhaps we should have been in when the 15m turned down?
Gamble or good entry?

I took a screen shot at the time because this is where I get stumped when like the 30m and H1 seem to be neither here nor there... Room to move up but also high and could easily drop

80 pips later...

Last little downrun was profitable.
Rey

Ok Spudites, and perhaps our fearless leader, Spud, here's a trade I marked up can you tell me if the entry/exit is correct?

first orange line = 5m short trigger
green line = 15m stoch closed down
enter at the open of next bar
second orange line = 5m long trigger
red line = 15m stoch closed up = MUST exit

please confirm if the 15m stoch close up/down to enter should be valid only when in the 20-80 zone, or is a closed 15m stoch valid in overbought/oversold territory as well? Thanks for the review.

PS that would have been good for 97 pips if I wasn't asleep at the wheel heh heh...

FW

I grabbed some pips going down but that drop on the 30M seemed like all of a sudden

Scalping intrigues me since long time but I never found a profitable scalping method, I guess your method Spud could be what I was searching for. When you have the time please could you post some screenshot with just the entries ?

Thx so much !

Skyline

does anyone look at any other pairs for this method?

ayaz, this method will work on any pair actually. We use the eurusd because of the low spread and I like it's predictability, but mtf stochs work on all of them.

That looks like a good entry to me but I feel better knowing where my other timeframes are as well. That will tell me what the M5/M15 have been doing.

Introduction to Stochastic Ropes V2.0

Please read the earlier attached PDF for the background on Stochastic Ropes.

What is different is that we now use x,1,1 in our stochastic settings, except 14,3,3 which becomes our "Rope". On my chart it is the thick black line. The blue lines represent the short time frames (6 to 13) and the red ines the longer time frames (15 to 24). Also added is a 100,3,3 stochastic line. This is our "Price Line"

What the Lines Mean

100,3,3 Purple Price Line - this is a close representation of our price movement converted to a 0-100 scale. If you follow the 100,3,3 line you will see it closely and accurately mimic our price line. I could ramble on here for 20 pages on this line but for our puposes it is our price line and it alone will tell us much without deep explanation.

14,3,3 Black Rope Line - a real rope is made up of hundreds of threads. Each thread is weak by itself and will break if pulled too hard. When all our threads are wound around our rope, our rope is strong enough to pull the price in a new direction. It is this simple. The tighter our threads are wound around the rope line, the stronger our shift in price movement will be. When the rope starts to fray, we will get price movement away from our current trend. When the rope gets tight again it will pull price in a new direction.

6,1,1 to 13,1,1 - these are our lower or lesser stochastics. These move price off their trend line when they move away from our Rope line. These are what measure the small price moves in a price trend line.

15,1,1 to 24,1,1 - these are our higher or stronger stochastics. Price will go where the red lines are. Price will follow the blue lines first, but will always go back to the red lines. Tricky part here is that sometimes our red lines follow our blue lines.

That's the wordy explanation, but this is a visual indicator so from here on, it is all visual.

Oh, I posted the template earlier but forgot the 100,3,3 line. So here is the proper template. If your working with me, use M5 EUR/USD.

Spud,

I'm looking forward to your Ropes v2 method. Your first Threads theory works rather nicely, but, a newer, updated version has really piqued my interest. Thanks.

The chart below show it all much clearer. Let's go from left to right on the chart. See how the stochastics all converge and cross our price line..see where our price line is, way down low. So, our rope is going to pull UP our price.
Now see the Rope line and the blue/red lines seperate. This is a great time to go long...now see "The Wall"....this is exit time. This is extremely easy to see forming in a live trade when the blues start to cascade down on themselves. When you see this forming it is time to exit. However, timing is everything. When this is forming the candle likes to bounce quite a bit, so you want to aim on the higher side (i.e. when the candle is even or better than our previous candle).
Now look at the frayed mess. This is ranging territory for sure or a trend break, In this case we go into a range. Scalpers delight because we want to wait for the wall to form and then go long to trade the rebound as blue gets sucked back up to our Rope Line. Just grab 3-5 PIPS here.
With every Frayed Mess comes a convergence not far behind. There is no entry here but you sure need to watch how all our red/blue lines come done on our Rope Line together..get out of the Long.
Here we are again..price line is low, we have a tight rope..we go long. Ohh...notice we cross upwards..that's very important...we want our rope to pull the price up. Again we have the seperation between our blue/red lines and rope line. As well we have seperation from our rope line to our price line..yep you got it...long trend.
See it fray in the middle, watch for the dip coming. This is a multiple choice exit...but I'd certainly think about the blue/red lines hitting the rope coming down.
Price is high, tight rope again (not super tight...but tight enough) crosses our price line down...go Short.
We get fray...time to think about an exit.

Now notice how at the bottom of this short our rope unravels and we go into a long.....this is a retracement as our rope is no longer pulling down so price wants to go back where it was. Also notice how our Rope Line (black line) is spreading apart and above our price line. You can also see in the dips, how our red/blue lines dip below price then cross above before the black line drops too much. Thos blue line dips below the price line are great scalps so long as our price line heads up we have 2 great long scalps here...that are we can ride to the price line or the rope line.

That was probably a lot to take in one chart but that is essentially how it all works. I think if you look at it enough it is quite clear. It is also much easier to see live than it is static as you can see everything forming.

Here's a little closer view of things.

Just want to talk about our price line a bit. Remember the 100,3,3 purple line mimics our price. We want to enter to enter our longer trades at the extremes of price movement, this limits our exposure to losses as well as increases our chances for success. This is very much like a price momentum indicator in that when we near 100% or 0% price is reaching a limit.

Ok, so on to the chart by the numbers:
1. Notice how our rope isn't super tight..as such we want all our blue, red and black stochastic lines to cross down below our price line before entering. What delays our short entry here is our 14,3,3 line. It may be tough to see on the chart but you can see where the arrow is that we have definite crossinfg of all the stochastics and we are falling away from the price line.

2. Scalpers delight. This is money in the bank. Grab this anywhere on the up or down..down is safer...but you just want to grab it high when it is above the price line. Go for a Short scalp or ride it back to the Price line or the Rope line...or close to. If you are making like 20 pips + off this trade...let's not get too greedy. Here you would have made a nice killing.

3. We have had our fray so it is time to thing about exiting our short. You'll be able to identify this over and over again and where the arrow is is pretty much your last exit point. Staying in longer is risky business. Why trade with risk?

4. This is a perfect example of too early long entries. There is absolutely nothing wrong with any of these long entries. However, you must stick to it. Notice our 14,3,3 is above our price line and as long as that holds true...stay put....you'll be stressed..but stick to it. If you are too stressed and in positive pip land, then jump out. Enter at the next long entry signal. You can scalp it this way too...in on the signal, grab some pips and wait for the next one.

5. Another scalp. Grab it anywhere high and then ride it down. I play these for 5 pips max...there are so many of these you can easily grab 20 PIPs a day just off these at 2-3 pips a trade. By far if you want a safe way to trade and make pips this is the way to go. The risk is almost zero because price is so far away from us. Just remember short and quick. Don't try and turn this into a 30 PIP trade over 60 minutes. I typically don't bother to use and S/L here there I just buy, sell, done. If it looks bad for some reason..wait until you hit breakeven and bail....price will bounce a lot and you will have plenty of breakeven opportunities to bail if you don't like it.

There are 2 other scalps on this chart when the blue drifts from our rope and price lines...right here we have 20 easy pips in just in scalps. If we did it all we have 80-100 easy pips this hour. All of it very easy to see.