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Stochastic secrets

  • #341
  • Edited 11:13am Nov 22, 2008 11:02am | Edited 11:13am
Quoting FXMajors
Could you be kind enough to tell were I can download the 2 Stoc you have mentioned in your post? Thank you in Advance

the 25 and 5 stoch method is by eelfranz starting at post 145
http://www.forexfactory.com/showpost...&postcount=146
  • #342
  • Nov 22, 2008 11:11am Nov 22, 2008 11:11am
Quoting TudorGirl
Hi, especially to Big E and Kudzu!

I have been looking at FX for about a year now but just reading and saying nowt. Everything I read (and my instincts) led me towards stochs as opposed to MAs or anything else.

I started reading Sexy Stochs where folk like ElChoco and BoxingIsLife seemed to be making loads of pips. But to be honest, even when they posted charts with "setups" I couldn't see them! Even when they explained them I couldn't see the setups!!!! :-((

Then I read Spud's threads on Stochastic Thread Theory, Rope Theory (2) and laterly...
Great to hear of your enthusiasm for Stochastics. The multi-fib Stoch can be a powerful method. The key is to be disciplined in waiting for the lines to converge around the trigger line (fall thru the 90% line or rise thru the 10% line).

Sometimes the converged lines will turn back. If so, then exit and re-enter when it crosses back over the trigger line(s).

You may only get one good set up per trading day, but that's ok. Usually it will be a strong one where price will move with momentum in its new direction.

I have a variation on this method that I will introduce in a new thread after our Thanksgiving holiday.


.
  • #343
  • Nov 22, 2008 5:50pm Nov 22, 2008 5:50pm
Quoting KudzuFX
I have a variation on this method that I will introduce in a new thread after our Thanksgiving holiday.
Hi Kudzu

Great - please post a link here so we can find your new thread!

TG
  • #344
  • Nov 22, 2008 10:10pm Nov 22, 2008 10:10pm
Thank you so much
Quoting KudzuFX
the 25 and 5 stoch method is by eelfranz starting at post 145
http://www.forexfactory.com/showpost...&postcount=146
  • #345
  • Nov 23, 2008 5:46pm Nov 23, 2008 5:46pm
Hey Tudor Girl & Kudz,

Thank you for the kind words Tudor Girl. It has taken a lot of hard work on the behalf of many presenting their ideas here. The key is practice, practice, practice and be willing to tweek what you read to fit your trading personality and style. Good pippin'!

Kudz - I like what you just shared with us. Thank you for sharing. Will be trying it too. Even if you only got one trade a day averaging 30 pip's profit and traded one lot on a standard acct. ($10 a pip) I suppose you could get by on that extra $6,000 a month.

Big E
  • #346
  • Nov 23, 2008 11:24pm Nov 23, 2008 11:24pm
Here's an example using the Stoch multi-fib lines on the M5 chart. If you placed a BUY at the 1st yellow line where they converge and rise up thru the 10% line you could have exited at the second yellow line.

The second line would be a good place to exit as the secondary %K lines converge downward.

There is certainly more than one way to exit using these Stoch M-F lines. This is just one example.

btw, if you had entered this trade and held it over the weekend with a protective stop to keep you in profit it would have netted you about 200 pips.

entry around 1.4730
exit around 1.4930
Attached Image (click to enlarge)
Click to Enlarge Name: stoch multi-fib lines 1b.gif Size: 21 KB
  • #347
  • Nov 24, 2008 8:07am Nov 24, 2008 8:07am
For those who have read the thread from the beginning the old 25,2,3 - 5,3,3 is still pointing the way. Big E
Attached Image
  • #348
  • Nov 24, 2008 8:31am Nov 24, 2008 8:31am
Kudz,

Beautiful trade big guy whether you took it or not. I could fit another $2,000 in my piggy bank... lol.

Question please: About half way thru the trade it's looking pretty scary with all the lines coming back down. Would you have normally exited there or stay the trade until it hits the top. Where is your decision point on exits?

Thanks, Big E
  • #349
  • Nov 24, 2008 9:48am Nov 24, 2008 9:48am
Quoting eelfranz
Kudz,

Beautiful trade big guy whether you took it or not. I could fit another $2,000 in my piggy bank... lol.

Question please: About half way thru the trade it's looking pretty scary with all the lines coming back down. Would you have normally exited there or stay the trade until it hits the top. Where is your decision point on exits?

Thanks, Big E

good question -
as for exit sometimes I just get out with 20 to 30 pips and go find something else to trade.

in this case I see the blue 100 K line floating horizontally which means after the initial shoot up price decided to range for a while. when you see the 100 K line go basically horizontal and the secondary K lines start weaving it means price cannot make up its mind.

so what to do?

Put a protective stop in place so that if price turns south you will at least get your 20-30 pips. Then sit on your hands. If it goes north then call your favorite restaurant and make early reservations.
  • #350
  • Nov 24, 2008 9:52am Nov 24, 2008 9:52am
btw,
eelfranz I still like to use your 25/5 stoch theory - good concept

I like anything with double or even triple confirmation. the trouble is when you use different indicator they often conflict with each other. when we can use the same indicator in two different ways to confirm entry I think we have put our trading in the higher probability zone.
  • #351
  • Nov 24, 2008 10:51pm Nov 24, 2008 10:51pm
Kudz,

I think your right buddy. As you know I use seperate indicators. When they line up and yell buy or sell it's a good trade. When I get 2 out of 3 confirmations I have to decide if I'll take on the extra risk.

Notice on my chart I have the Raghee 34 EMA's. If my 5 EMA/Close, Shift 3 was on that chart... you would have gotten a much earlier buy signal and probably would have made an extra 20-30 pips.

Thanks for the answer to my question. I have been reading the Sonic R thread using my two stoch settings and it looks good there too.

Let me know about your new thread too. Like to stop buy and kick a tire or two.

Well, Bessie wants to go home so I'm gonna unplug her, load her up and hit the road... lol.

P.S. Wow on market moves last night and today! Big E
Well
  • #352
  • Nov 25, 2008 6:00am Nov 25, 2008 6:00am
Quoting eelfranz
For those who have read the thread from the beginning the old 25,2,3 - 5,3,3 is still pointing the way. Big E
Hi Big E,

I didn't read the whole thread but I got the idea of your Stoch method and I need to use it on another 15min system. So, I'm gonna give it a try and thanks for the brilliant idea.

Happy pips.
Sniffing Snake's Tracks...
  • #353
  • Nov 25, 2008 10:50am Nov 25, 2008 10:50am
FX.S,

Please be aware that you don't just jump in and expect perfection. Demo trade it until you learn the in's and out's of how it works on your favorite pair. I trade EUR/USD.

On your chart pair uncheck the auto scroll button and take your charts way back. Observe how this set up acts and the relation between the 25,2,3 and the 5,3,3. Get a feel for the psychological turmoil you will experience during each trade cycle.

Sometimes I use a RSI (14) to watch up's and down moves on the line. Sometimes I add OsMA for additional confirmation.

Tinker with it until if fits your trading personality and style. I look for the stocks and any other confirmation indicators to line up.

I think Dudz said start at post #145 and up to get a better feel for it.

It works for me is all I know. I've spent hundreds of hours chart time trading and observing ther moves.

Ask questions here. Good Pippin'. Big E

  • #354
  • Nov 25, 2008 10:57am Nov 25, 2008 10:57am
Kudz,

While thinking about your recent posts a flashing light went off in my brain... what's left of it.

I bet most of the people don't know how to set up your Stoch Indicator with multiple Stochs in just one indicator window like you have done.

Maybe a few how to do it might help the audience. Just a thought. Big E
  • #355
  • Nov 25, 2008 10:59am Nov 25, 2008 10:59am
Hi Guys

Attached a little trade I just took. 100 pips in 45 minutes. Note the perfect stochs lineup at the start then the exit when the 25.2.3 crosses the price proxy.

Kudz and Big E -- THANKS!!

TG

(Trading in the UK on IG-Index so profits tax-free!)
Attached Image (click to enlarge)
Click to Enlarge Name: eurusd_25112008.JPG Size: 99 KB
  • #356
  • Nov 25, 2008 11:38am Nov 25, 2008 11:38am
Hi, great trade!

What stoch setting are you using for price proxy, is it 100,3,3 or similar?

ok, what does this mean:

(Trading in the UK on IG-Index so profits tax-free!)


thanks!

FW
Isolate yourself from the herd
  • #357
  • Nov 25, 2008 12:29pm Nov 25, 2008 12:29pm
Quoting forexweasel
Hi, great trade!

What stoch setting are you using for price proxy, is it 100,3,3 or similar?

ok, what does this mean:

(Trading in the UK on IG-Index so profits tax-free!)


thanks!

FW
Hi Weasel

The lowest panel has Big E's two-stoch method 25,2,3 and 5,3,3 together with a 100,3,3 price proxy - a tip I picked up from Spud. When ALL THREE line up and cross up thru 10 or down thru 90 this is a really good place to open, most times anyway. Then when the 25,2,3 crosses the 100,3,3 it generally means the action is pretty much over (again, most times!).

Regards IG, folk outside the UK may not be aware of our tax laws. The UK pioneered spread trading where the trade is structured as a "bet" and not as an "investment". This means that almost no-one uses brokers now in the UK. Under the Gaming Act, you can choose either to pay tax on the betting STAKE or on the WINNINGS. Of course, everyone chooses to pay on the stake and then all winnings are completely tax free. Companies like IG offer access to thousands of markets (50+ indices, all FX, 10000+ shares from every country in the world, all bond markets, house prices, oil, commodities, gold). You name it and IG trades it.

The ONLY trading cost is the spread (usually 2 pips on indices and FX like EUR/USD). No brokers fees, commissions, nothing. And like I say, a notional fraction of a penny is paid in tax (about 0.1 pip) by the broker so all winnings are tax-exempt under UK law. So you can keep the proceeds of every hard-earned pip! Neat eh?

TG
  • #358
  • Nov 25, 2008 12:56pm Nov 25, 2008 12:56pm
Hi

Attached are the other two trades I took today. I know this an FX site but I also had a flutter on the FTSE M5 chart at lunchtime. Note the neat alignment of the stochs on the short entry. I had quite a tight trailing stop on this as I had to go at 1300 so only took 40 pips. But nice.

Also, just finished a EUR/JPY trade. Again, perfect stoch lineup at 1804 (UK time) and exit when price proxy cut the 25,2,3 around 1828. So another 80 pips in 25 minutes.

These trades are NOT that frequent (say 2 a day) but are quite good "certs".

So, that's me done for the day. I can afford a vodka and Red Bull with the girls....

TG
Attached Image(s) (click to enlarge)
Click to Enlarge Name: ftse_25112008.JPG Size: 94 KB
Click to Enlarge Name: eurjpy_25112008.JPG Size: 98 KB
  • #359
  • Nov 25, 2008 1:20pm Nov 25, 2008 1:20pm
thanks tg, I also have migrated back and forth between spud,boxing and this thread. For sure this thread's methods are the easiest to follow. That being said, there are great ideas on the other threads that may be able to be integrated as well. You seem to have done this well - I hope I can copy that!

FW

oh yea, thanks alot to eelfranz and kudzufx whose ideas are really profitable!
Isolate yourself from the herd
  • #360
  • Nov 25, 2008 3:27pm Nov 25, 2008 3:27pm
Hi

Back from having a few Pan-Galactic Gargle-Blasters and in a philosophical frame of mind.

The strategies of Spud, Boxing, etc etc are all very well but just look at the number of variables they are tweaking!

We MUST approach trading with at least a P-value that would pass muster in a serious academic journal. So even if we are looking at a Chi-squared stat with N degrees of freedom we would need say, at absolute minimum, 35 trades for each degree of freedom in the trading scheme. And that is just at the 95% level of significance.

What attracts me to the Kudz-BigE combo strategy is the zero degree-of-freedom strategy. The confidence level here is quite high because there is nothing to "frig" - the system is quite mechanical.

Statistical validity is important, and this system has it. Yes - we can learn from, and incorporate, ideas from elsewhere, BUT our system has to be "exception-free".

TG
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