Spud's Predictive MTF Stochastics

hello!
I have been following this thread for couple weeks now,
and I find it very interesting.
And i would like to ask some of you some questions.

1. What time frame do you guys usually trade? (Opps sorry Wrenski, I meant NY session London Session or Tokyo Session)

2. How much funds do you have in your account?(I have about $600 mini account began with $300)

it will be great to know these, because I am a newbie!!

1) M5 (5 minute)

2) Not enough, yet. How much do you have in your account?

You're right, I took my eye off the H1 which was on it's way up. Turns out it was a little retracement on an escalator ride up.

I'm slowly learning...

Hey Spud and gang,

Ok, I opened up a demo account at Interbank Fx trader.
So my charts look exactly like yours except for 1 small thing.

I can't seem to get the stochastic indicators 6-1-1 / 25-1-1
for the rope system to overlay onto one chart?

Does anybody have any idea on how to do the overlay the stoch's?

Also, should we put the stoch indicator 100-3-3 on all our
charts for the different time frames that were using in smtf.

Thanks

snarlyjack

Open the "Navigator" window and it will list all the indicators....add a stochastic to your chart....then drag the stochastic indicator from the Navigator Window to your stochastic indicator on your chart, change perameters, repeat.....or use the template I posted way back.

You can put the 100,3,3 on all your PMTFS.

Thanks Spud!!!

I appreciate all your help. I'am on the same page as you are,
so far so good. Up, up and away...Please keep on teaching
us. I'am learning from you in Montana, USA. I think people
from all over the world are learning from you. Your doing great
and we all appreciate it!

Once again thank you!!!

snarlyjack

will update if need be

Your doing a wonderful job Cindy!

thank you cindy

i ve a question to spud about the management of the trade itself
when do you move your stop to breakeven? or when to move your stop to a profit ?
for example
if i ve

5m trigger long
price follow in an up move
15m follow the price up - it closed at 20%
but 30 didnt turn up yet

sometimes the move is strong and drags 30m up in the next candle and if we wait for 30 confirmation we would loose the majority of the move
sometimes the trend fails and 30m doesnt follow and drags 15m down again

how do we protect our trade if it fails back and also leave a room to ride the newborn trend ?

i think thats my problem when i go life
i wish i can express myself in a better way and sorry if my english is poor
thanks spud for all you teaching

PWC AND IB

Here's the same thing, but perhaps a little more black and white entry and exit strategy.

In this scenerio, we use PMTFS only as confirmation our stochastics are in a support position.

The trade entry and exit is always led by the Peak, Wall, Cross or PWC on the Sonic Indicator. I've identified the 3 PWC's on this chart that occur for this trade. You can see they are clearly identifiable. A PWC is made up of 3 parts:
The Peak - which is simply and abrupt change in direction of the stochastic hitting a low or high extreme on the indicator window. How extreme the peak must be is a matter of acceptable risk. I prefer it in the above 80 or below 20....hitting 100 or 0 is best and anything in the middle between 20/80 is riskier.

The Wall - the wall is a defined line after the peak. In our example below the red channel is defining our wall and travels from the Peak's point to the Price line and/or Origin Line. The wall is simply where we have no stray stochastivc lines spreading past. You might call the wall convergence of our Index and Slow Channels. The wall can be made of the blue Index or red Slow channels. The wall is always on the right side.

The Cross - this is when ALL (or dang near all) our blue Index or Red Slow Channel lines cross the Price Line and or Origin Line...no need to cross both but must cross one. The Cross direction determines Long or Short. We prefer to have Long crosses low (below 25% ideally) and Short crosses high (above 75%).

What the PWC looks like on the Sonic Chart is simply a very well defined converged peak of red and blue lines and shortly after a crossing o the Origin and/or Price Line....and that is all you really need to see.

The entry (and Must Exit) is at the Inner Bar (IB) that follows the PWC (or occurs at the same time). You will find many crosses occuring when an IB is formed. We enter at close of IB candle (and Must Exit).

The Stop Loss is quite tight at 10 PIPS below the low of the IB...you can use a larger or smaller S/L (5-20 below the low). You'd use the IB high and go above the high for a short trade. 10 pips below the low or above the high of the IB is a nice compromise on the M5 and will keep you in most trades.

In the middle of the trade, after our entry on the chart below are 2 IB's. Notice the first is another long entry indicator...PWC and IB...we stay long and adjust our S/L to meet this new signal. The second IB is a false signal....because we did not have a PWC (short) prior to it...stay long. The PWC is an IB filter and havinf the PWC occur before (never after) the IB is confirmation an IB is valid. (PWC and IB can occur at the same time...almost always you will see a peak and wall before the cross and IB).

Our exit is a little tricky as an example because we can see the PWC at the exit IB...but in a live trade you would not see the PWC yet where the IB is. The validating PWC for us on the Must Exit occurs before th IB about 15 minutes earlier. It is a Short PWC and as such the IB signals a Short entry and Must Exit for our long trade.

This system is highly successful in terms of identifying entry and Must Exit. Where your challenge is is optimizing your exit for greatest PIPS. There are several exit options:
1. Long Entry to Short Entry (Must Exit) - easily identified but not always maximum PIPS
2. Targeted PIPS - use the reverse PIP range of your S/L and make this a 1:1 trade
3. Fibonacci from entry
4. Any IB - exit on any IB after entry
5. PMTFS, exit on M5 trigger points

This strategy demands attention and being at your computer...if have to watch for the PWC and the IB...the secret is to know which PWC is your active PWC and clearly identifying it. In this exmple if you look at our Exit PWC and exit IB there is a small , kinda looks like a PWC and upward cross of our stochastics......this is not a PWC...PWC look well defined and are extremely clear....don't overthink what you see.

This sytem plays every hill and valley in a trend, so it can be quite fun. If you are a PIP sniper you will love this. If you are trend trader you probably should try it on the M15,M30 but with much larger S/L.

Pips usually range from 5-40 PIPS a trade...many will be 10 and under. You can play this with multiple lots.....set an exit at Must Exit and an exit at 10 PIPS or first IB.

Programmers: If there is a way to identify and alert on the PWC this would be of great benefit for some I think.

If your winning % and PIPS are high, don't be afraid to grow your S/L. For example if you are up 100 PIPS with a 80% win rate, then add 10 PIPs to your S/L and see what your win % to PIPS are..tighten if it you get stopped.

Spud,

I noticed that you have changed your M5 stoch settings, and as far as i see you have changed the some rope setting too, could you please give us an updated template or the new stochastic settings.

Thanks

Apologies, the M5 was incorrect it should be 14,1,1...I've updated the chart.

Hi Spud thx again for this new lesson
Looking at your last example your first long entry at 14:05 is when price stoch (purple line) is very high instead to be as supposed below 10%. So my doubt is : wasn't a rule that we want to enter only when price reach it's extreme (long below 10% and short above 90%) as you said in your former sonic lesson ? So in my understanding I wouldn't entered long at 14:05 and I would only had taken the short later (price stoch is above 90%) at 15:35, isn't that right ?

Cheers,
Skyline

Good question and observation. We've added a couple of elements here that add more opportunity.....or different opportunities. Certainly you could play it under those rules only. With the use of the IB and a tighter stop we have good opportunity. This is actualy an elastic trade...since the 14,3,3 is likely to rise up so that the 100,3,3 can come down. With a PWC & IB signal we expect some sort of movement. We also have an exit for this case...since the 14,3,3 may not go all the way up and we need to know where to exit so that we don't get caught in an overmarket. So, in this case with this indicator setup, yes we can trade it. Obviously the more spread between the 14,3,3 and 100,3,3 the better in this case and ideally our original rules are the "best" or safer trades.

Here's a sample at the 61.8 Fib:

Spud, just to be sure on the inner bar or IB you mentioned. Is that a bar which is completely within the range of the preceding bar?

Thanks/Harry

Yes...or equal too.

I'm posting my normal "coloured" charts as my eyes are starting to suffer from retina burn with the white background....which I only use for the benefit of printing. Hope you don't mind.

And an example of why we want spread between our Origin and Price Lines or our Origin/Price line at an extreme...otherwise you might see a stop loss like teh chart below. Risky setups like the last 2 charts ...sometimes they work and sometimes they don't far more often then using the extremes.

I found this IB indicator that may be useful to help you see the IBs easier with different colors. I set the number of previous bars to 1.