Spud's Predictive MTF Stochastics

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I like the JPY pairs, and I have tried this method especially on JPY/EUR & JPY/GBP and I noticed that does not work just like on EUR/USD, their movement are different.
In last week JPG pair was almost ranging, and were up and down for a few pips, not easy to find an entry. But usually they do much larger movements.
The market always changes.

Lubo

Spud,

Can you take a look at this and see why this wouldn't have worked out? I'm using the M5/M15 crosses with the M1 overmarket filter. Trading only on the M5 tf.

I just went live with this one.

MMM I can't tell why it reversed. Lets see what Spud sez. ( actually still like when the m15 points my way and is below 80 for a short) Anyway I entered on the next trade y ou posted when the M1 went to oversold like you did but the price isn't moving much. My SL is at the peak so I'm biting my nails a bit.

FW

Here's a stoch cross alert modified to paint an arrow when the priceline goes >90 or <10.

I didn't know you were a coder

I'm up +8 right now.

**EDIT: I exited at +6.8 when I got a M5 long trigger.

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I do not want to answer in place of Spud, I say only my opinion.

I do not think that this method is always infallible, this is probably one of those moments.

However, if you note the price line does not pointing down and filter line already point high when u entry into the trade.



Lubo

Yes, I see. You're right..that may have been the problem.

No I don't know how to code, but I searched for a stoch signal that would email me when the priceline was extremely oversold or overbought cause I didn't want to sit at the computer all day no reason. The closes I could find was someone explaining on one of the forums how to modify the stoch crossover indicator to ring when the stoch reaches a certain point. Just changed one line of code. Not brain surgery. I sure wouldn't try to write an indicator from scratch.

PS I'm stil in that trade, + 7, but moved my SL to BE. I think the long term stochs may turn down in the near future??? Don't want to miss the escalator down. Anyway its a free trade right now.

FW

IMPORTANT PS. YOu have to change the setting to 100,3,3 for that indicator to work!!!

I have done, to my indi, part of the change that you asked me. I'm working to make other changes and additions. I will post it when I see that they work well.

Lubo

This is an early entry. If your mental stop loss is set at the peak (as shown) +10 pips you'd remain in this trade. You stay in until you are positive pips or you reach the mental stop and there is no hope on M5 and/or M15.
Have we made pips? No.
Is there any signal for long? No.
Did we hit the mental stop? No.
Stay put. If the trade isn't to your liking set tp to 0 pips and either wait until we hit a condition that takes us out or you get out unscathed.
This isn't a pretty trade but M15 gives us all the reason to ride this out.

We will get false entries. The filter cuts those done but does not eliminate them.

Spud, will you lecture us on money management with the system? I feel like I should put two trades in....one with a TP of 10 which is almost always hit, and another moved to BE when the first one hits and just watch it through the different TF's. Perhaps you can be more certain of + pips most trades while not missing out on the escalator set ups?

FW

Ok, let me simplify this....

The chart below identifies the 5 last most obvious, and most reliable trade entries today. I am only looking at the Origin line crossing above 23.6 or below 76.4 and the Price Line with the Origin line. Whether we enter these trades depends on 3 other criteria.....our M5/M15 cross, our M1 filter, and our M5 cross 20/80. Again, this is the pickiest of picky trade entry situations. The 3 other criteria are there to confirm the "off peak" trade developed by the Origin Line and the Price Line.

So, the first criteria of money management is met that we want to know that our entry will be successful (as sure as we can be).

The next criteria is that we do not want to set our hard stops where our friendly broker can spike us out. Ideally, price will not draw down against us, but it will from time to time. We want a mental stop 10 pips from our peak. Our peak is the lowest or highest spot...we are always trading "off the peak".
We set an emergency stop 50-100 pips away from our entry...this is a hard stop. Our mental stop is 10 pips plus the peak,,this is a soft stop..one that does not exist other than in our brain. The red horizontal lines represent our mental stop. Please note that we never crossed the red line.

Each possible entry has a 15 PIP green line profit scale from entry to +5,+10 and +15 pips. Notice we are 100% on 15 pips. Notice how many times 5 pips is hit vs 15 pips. Notice how easy it was to hit within this 15 pip profit scale...this is profit (less 2 pip spread on entry and exit). Our final criteria is take the pips when you get them.

This is why I preach 20 pips per day. You don't need to chase trends or exit signals. This is 5 possible trades netting 75 pips in 12 hours. If you miss 2 entries...it is 45 pips. If you miss 4 entries it is 15 pips. Put your dollars in PIP value not chasing large numbers of pips. At $10 a pip this is $750 in 12 hours.

So here is how you manage your money:

1. Start trading with $0 per pip and learn to identify these entries. Demo trade the entries until you can win 80%....that means you don't hit the mental stop 8 of 10 trades. Track how many times you hit 5, 10 and 15 pip gains (net). Analyze why you failed...I will bet 80% of failures come from too early an entry.

2. Start trading with $1 a pip and target 20 pips a day. By now you should have no problem seeing the entries. Trade for 5 pips a trade...trade a smuch as you can. You will make more than 20 pips a day...but never think you are trading for more than 20 pips a day...rejoice that you set out to make 20 pips if you make 100 pips. As you succeed raise yourself to target 10 and 15 pips...but never be afraid you will hurt ypur ego if you jump out at 5 pips.

3. Every time you make more than 20 pips a day...you "bank" the rest. So if you make 80 pips in a day you bank 60 pips. This bank of pips covers any losses you suffer. Keep doing this until you make $5,000 at 20 pips a day. If your good it will take you 250 trade days at 20 pips a trade day If you want to speed it up use 50% of your banked pips to add to your $5,000 total.

4. When you have finally mastered the dicipline to do this (wax on, wax off...wax on, wax off)...then either trade a real account or trade $2 a pip and work your way up in $5,000 intervals. By now you are printing your own pay cheque and know what you are doing....and 20 pips a day gives you a life! That is the most important thing!!!!

That's it. That's my lecture on money management. I know that 99% of people who read it will ignore it. This is how you make an income you can rely on from trading. It is simple and unfortunately you won't have 200 pip trades to brag about...but you will make money this way and you will control it.

Why do you say that it's an early entry? Thanks for your time by the way!

I'm experimenting with using stochastics on various time frames and I have a question on setting up the indicator...you mentioned to get rid of the "D" period - how do i do that? Currently I have the 15M-4HR set to 14,3,3 however when I do that 2 lines appear? I go into properties and attempt to delete the D period, however it cannot be done. If I put 14, 1, 3 however it will only show 1 line - is this how I should set it up? Thanks.

Hi Ragu you can simply change the colour of the %D line to your chart background color or select "none" Magically it will disapear

Thanks Cindy - it worked like a champ.

May be a long entry coming sooner or later.