Spud's Predictive MTF Stochastics

thanks

Hi...

I liked the idea being followed... I am trying to implement it in a demo account. However.... I wanted to put things together on one chart so I made this indicator... it may or may not have already been made by someone.

This is an indicator to show the different stochastics of different time frames (1M to 1Day) on the same chart... You can select the ones you do not want to show. I decided to make it in order to have all indicators on one chart instead of having several chart windows open at the same time... this can help if you want to display the same setup for different currencies at the same time...

the tricky part is keeping in mind that the different lines represent different time frames and hence the 4H line represents might be showing the movement for the whole week while the 1M line may only show one or two hours...

Regards

I prefer to see the peaks above 80 or higher (or below 20).

I guys I want to show a trade I'm on +113 pips now, I entered few hours ago on the cross of purple and black line
I'm new to this strategy, and I should be probably out of this trade from a while but I was impressed by the nice entry price I got..

Entering tardes is fairly easy, exiting is far more the challenge.
One way to pick a trade apart is to play it one Fib level at a time.

The chart below is an example of this. Let's start with our entry.
Sonic Indicator:
Channels converged and went down through the Origin and Price Line.
Price Line is high, so if I am wrong the losses are minimal.
Our target is the first Fib (1) at 76.4%....this requires an 8% drop in the Price Line which is at 84%.
PMTFS Indicators:
M1 is below M5 and I am "anticipating" that M5 will cross M15 down. I look at it this way, with the Price Line at 84%, I have a 16% chance of failure and an 84% chance of success. I believe that to be true because of the positions of the stochastics, the Sonic Indicator and that a price fluctuation down to the 76.4% line is an inevitable outcome.
Our S/L is Price Line hitting 100%

We have hit our first Fib and suffered little in draw down through the process. Our S/L stays at 100%. Our target for the Price Line is the the next Fib level down at 61.8%.
We can estimate PIP value by looking at what price was the last time the Price line was at 61.8%...it gives us a rough guideline.

Looking at PMTFS:
M1 is down at 10%..so it may peak and climb or stay oversold.
M5 has crossed M15..which we know is a good sign so we would anticipate the M1 may cycle up and then M5 and M15 will continue down. So short term we expect some retracement in price...what we don't want is a big retracement. If we are wrong we will likely lose small PIPS. If we are right we will increase our PIPS.
Our Sonic Indicator is a little concerning because the Index Channel is in a typical position where we might think of entering a long scalp. However, our Slow Channel is quite low and converged. We are still in a good short indication here and nothing yet has indicated a reversal otherwise. Again, we know from PMFTS that we expet M1 to climb and our Price Line may move up, but we are anticipating it will not move to our S/L.

We've now reached the 61.8% Fib (2) with out Price Line....actually we went way by it and are very close t0 the 50% Fib at candle close.
Our S/L is now 76.4% for our Price Line.
We might as well run to 50% Fib since we are so close or exit.
We are in some dangerous looking up moves with both PMFTS and our Sonic. BUT...we have a valid PMFTS Short showing...see our M5 trigger way back there and our M15 pointed down. So, let's run to 50%...we are in profit anyways even if we get stopped....this could be an oversold market happening.

Our Price Line has hit 50% and not much chances...except we can now set our S/L at 61.8% for our Price Line.
We can exit or we can play by pure PMTFS rules...and that is our M5 has not triggered a Long and our M15 still supports a short.
Sonics has all Channels crosing the Origin Line, so that's as good an exit signal as any with Sonics alone.
At the 50% fib we really are at a 50/50 decision as to whether to pursue this or not. What we don't have are any long trade signals..and if we don't have any long trade signals...why not stay short.
M1 and M5 could easily go down as much as up here...so realy we have more support for our Short since we have no long entry, do we not?
If you are cautious exit, or play with a zero tolerance S/L on the Price Line..and put the S/L at say 55% and try for 38.2%

With Price Line reaching the 38.2% Fib (4) and our M5 showing a Long Trigger on the PMFTS, it really is a good idea to exit now.
If you want to target the 23.6% Fib, I would set my S/L at 44% (half way between 38.2 and 50) and if the Price Line rises to hit it we are done. In other words, if we continue short, it either goes straight down or we are out.
If we hit 23.6% (5)..than use the same tactic to target 10% or 0% and set the S/L at say 30% where if the Price Line hits that we are out.
PMFTS would tell us we still don't have a valid long yet, so why not try for the short...just be very tight about it.

IMPORTANT! We used PMFTS here to support our continued Short position. Do not simply rely on the Sonic indicator and play Fib to Fib...you'll surely lose. PMFTS has to support you and not counter you. You can "anticipate" what PMFTS will do if it is supportive of your trade...do not anticipate against your trade. If you are worried about your decision tighten your S/L against the Price Line...but not too tight.

thanks for the education... ..easy to get in system. Out seems a lot harder.

I was trying to get a grip on all that and now watching it step by step makes it all gel together for me. Thanks Spud!

Thanks Spud! Looks like your example chart is actually playing itself out right now as I type this no?

I was watching this one too but only just realised pretty much since the start of the asian session we have been on an escalator to pips ride long - so I'm thinking we shouldn't be looking short until the 15m and 30m start building down and get under 80, unless its for a very quick scalp.

If I'm wrong I hope someone corrects me

Cheers

i agree with you cindy
better to wait for 15m and 30 m to be under 80%k
1h is going up things are not clear yet
we need to see 15and 30 leading 1h down
cause we are in an up trend now maybe it is a pause and trend ll go up more

Thx Spud for your examples
In the quoted text I guess you mean M5 is showing a Long Trigger instead of a Short trigger (M5 is below 10%) , isn't it ?

Cheers,
Skyline

Thanks Spud, nice explanation, very usefull

Good catch Thx.

You're welcome Spud , thx to you !

Hey Spud,

I opened a short trade this morning at 12:02 using the 5m/15m trigger to enter what looked like a forming MTF trade down. The fifteen was closed in my direction below 80 and the 30 was the same. After taking some heat, it went about 15 pips in my direction then did an about face. Currently the 30 and 1 are still closed in my direction but the open candles are against me. My question is (and it may go back to the original MTF trades vs. PMTF trades) should I have exited when I had the MUST exit signal on the 5m/15m setup even though when that happened the longer stochs looked favorable ala the longer MTF trade I was stalking? Thanks!

ps perhaps ignoring the h4 was a bad idea here!

pps perhaps ignoring the news was also a bad idea here!

anyway my original question still stands, thanks!



FW

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