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Spud's Predictive MTF Stochastics

  • #1,441
  • Edited 1:56am Jan 13, 2009 1:30am | Edited 1:56am
just some thoughts.

playing around with different filters it basically boils down to this:

As I mentioned in some posts much earlier my feeling about too much filtering seems to get more and more confirmed.

I know we all strive to get close to 100% success rate.

But in fact that might not be the most profitable thing to do.


1. imaging we could filter all bad trades so that only good once are entered
POSITIVE would be: we could place all our money on such a trade
NEGATIVE: there would be properly not many trades and our TP would be just a few PIPs (but ith a great value)

(I doubt that we can do that 100% and get still a meaningful number of trades).


2. as we properly do not get a guaranteed 100% success rate we might go for a very close to 100% (say 95-98%) one.

Actually I think this is with filtering possible: but the problem is that we might filter out so many trades that we are still left with just a couple and as we are having not a 100% success rate - one loser might wipe out much of our profit.


3. we might not filter out so many trades - which leaves us with much more looser but also more winners (hopefully).



I have seen all of such 3 option (well just for a short time for 100% ;-)

The real art is to find the best overall ration.

If one does not filter - even if the overall ration might be successful - the problem will remain that we get many winners but also many looser - which makes it difficult to commit a good amount of money per trade as one must expect a couple of looser in a row.

Trying too much filtering is still enticing (graving for risk free trading): The problem is: is there ever a chance of being 100% sure (which to my understanding is not)


So the real aim - I would suggest is to follow what produces the most profit over a good amount of time. (taking into account a reasonable risk)


MJ
__Thanks__ MJ
  • #1,442
  • Jan 13, 2009 3:46am Jan 13, 2009 3:46am
cubicrey,
I see two problems.

1) The M5 stoch on your template is set to 14,3,3 whereas Spud's rules and my stoch show 14,1,1 just for the M5 stoch.

2) The big problem however is the method of offsetting the higher time frame plots on the faster chart, in this case the M5 chart.

If you would read my two postings explaining my method and then compare your stoch displays to separate higher time frame charts you would also see the problem.

Each candle or price bar represents a period of time for instance a candle on M15 chart lasts for 15 minutes of time and the label associated with that price bar is the starting time for that bar, not the ending time. The close price of a CLOSED candle is the price at the end of the time period associated with that candles label. For instance am M15 bar labeled 21:15 has data starting at 21:15 and ending at 21:29:60. One second more and a new price bar starts.

Historical indicator plots are showing values based on closed bars.
On an M15 chart a normal, regular, non time shifted stochastic will show a stoch value based on data through the CLOSE of M15 21:29:00 not the start of 21:15.

The stochastic value of M15 bar labeled 21:15 is not available until 21:29:00.
My plots will show the value seen on chart M15 at label 21:15 and plot it on M5 chart starting at 21:30 for 3 bars since 21:30 is when the M15 chart started a new bar, the prior bar was closed and the complete data was available.

Your version is plotting the value from a closed higher time frame bar at a time in that bar's past on the lower time frame chart which is invalid and can lead to false conclusions if backtesting with those lines.

For instance EURUSD Jan 13, 2009 10:30 GMT+2 (my broker chart time) M15 chart at Spud's settings is 52.3962.

On my chart you see that same value plotted on M5 chart at times 10:45, 10:50, 10:55. On an M5 chart the close of bar labeoled 10:55 will also signify the start of the next M15 bar.

On your chart this same stoch value 52.3962 is plotted at M5 chart times 10:30, 10:35, 10:40. This is wrong because that value did not exist until 10:45.

I hope this does the trick for you.


Quote
Hi All,

Try to compare attached Stochastic_Standard_4TF_cja.mq4 and DME_HM_5Stoch1Line.mq4, for example in TF 5M, you can see the M15 Stoch of DME_HM_5Stoch1Line.mq4 is not tally with TF 15m with 15m stoch only. 4TF_cja is more accurate. Check and see.

template is included, all stoch set to 14,3,3; H/L; close
red=m5
yellow=m15
blue=m30
green=h1

As such, combine 4TF_cja with DME's features (5 Stochs) would be nicer.
  • #1,443
  • Jan 13, 2009 8:00pm Jan 13, 2009 8:00pm
Quoting mooselover
cubicrey,
Your version is plotting the value from a closed higher time frame bar at a time in that bar's past on the lower time frame chart which is invalid and can lead to false conclusions if backtesting with those lines.
This is the key.

Thanks for your time and clarification.

Reyna.
  • #1,444
  • Jan 15, 2009 3:30am Jan 15, 2009 3:30am
Quoting mooselover
Attatched is screen shot and my interpretation of a multi stoch indi to match Spud's rules of closed bar values.....


...
Feedback is welcome.

hi mooselover,

I played a bit with your indi - seems quite nice.

One thing I wanted to give as feedback: e.g if I have open the 5 min chart with default setting all the higher Time Frame Stochs are painted as steps - which I think is a very nice idea.

But I would find it even better if the steps would be only horizontal and vertical lines

you use always one Candle between to move to the next level

Not sure if I explained that well.

I show below a pick.
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot.png Size: 4 KB
__Thanks__ MJ
  • #1,445
  • Jan 15, 2009 3:36am Jan 15, 2009 3:36am
If you put your cursor line on each bar and then look at the stoch value it is correct for each bar. The sloped line is connecting those valid price points. The plot is accurate. In order to put a vertical line in place would mean that whenever there is a stoch value change there would have to be two stoch values ploted on one time bar which does not really make sense. For instance to have a vertical line from say stoch 45% to 48% you would have to have both of those values on the same bar.
This indicator is using the time series plotting ability of MT4. It is the way all time series is ploted using an array, one value per time bar. To do what you ask would require an entirely different method to paint the info, manually using objects and I believe very messy, lots of work and for value I don't see.
  • #1,446
  • Jan 15, 2009 3:42am Jan 15, 2009 3:42am
Thanks -- I do not know anything about MT4 - just installed it to be able to follow a bit better manually what Spud explained.

The other thing I noticed is If I switch to time frame 1 hour the 4 hour display is way back I mean it ends now at the 2. january 7:00

also on the lower time frames
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot-1.jpg Size: 142 KB
__Thanks__ MJ
  • #1,447
  • Jan 15, 2009 3:49am Jan 15, 2009 3:49am
Thanks -- I do not know anything about MT4 - just installed it to be able to follow a bit better manually what Spud explained.

The other thing I noticed is If I switch to time frame 1 hour the 4 hour display is way back I mean it ends now at the 2. january 7:00Thanks -- I do not know anything about MT4 - just installed it to be able to follow a bit better manually what Spud explained.

The other thing I noticed is If I switch to time frame 1 hour the 4 hour display is way back I mean it ends now at the 2. january 7:00


m_j
Could you explain a little better what your point or question is? Is this a comment or a question? What indicator are you referring too and what pair? etc etc etc.
  • #1,448
  • Jan 15, 2009 4:06am Jan 15, 2009 4:06am
Quoting mooselover

The other thing I noticed is If I switch to time frame 1 hour the 4 hour display is way back I mean it ends now at the 2. january 7:00


m_j
Could you explain a little better what your point or question is? Is this a comment or a question? What indicator are you referring too and what pair? etc etc etc.

Sure: it's just a feedback! I refer to your indi:

Quoting mooselover
Attatched is screen shot and my interpretation of a multi stoch indi to match Spud's rules of closed bar values.
I took a other pic with default settings:

look at the red stoch??

Not sure way - just open a new EUR/USD Chart and loaded the indi.


Funny - on your post it is ok -- using Windows XP (Virtual Image on linux)
with META Trade demo.


Tried it now also on FXPro demo -- where it is OK.
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot-2.jpg Size: 229 KB
__Thanks__ MJ
  • #1,449
  • Jan 15, 2009 4:13am Jan 15, 2009 4:13am
M_j
I dont have an explanation for your H4 stoch line ending way back in time.
If it was me I would change time frames and come back to that one. Also I would try another pair on that chart and also make a new chart of same pair. After doing any or all that you might find it is ok.
I have noticed when I launch my platform with pre loaded charts saved from the last session that some stoch lines are broken up a bit, not all lines and not every pair and not every launch. I change time frame and come back to the time frame I want and it self fixes.
  • #1,450
  • Jan 15, 2009 4:26am Jan 15, 2009 4:26am
Quoting mooselover
M_j
I dont have an explanation for your H4 stoch line ending way back in time.
If it was me I would change time frames and come back to that one....

Thanks for the tip. actually it worked as you said. quite annoying feature ;-)

hi do you feel up to join us on Monday with our joined journal or would prefer not to?
__Thanks__ MJ
  • #1,451
  • Jan 15, 2009 4:35am Jan 15, 2009 4:35am
hi do you feel up to join us on Monday with our joined journal or would prefer not to?

I will monitor but really cant commit to consistant trading with something mostly related to spuds. Too many irons in the fire right now with different systems I am watching and some EAs to finish code to help my testing of various things. Also I am trading live so tough to do all of that and to also trade a demo with consistantly only one method...

I would think it reasonable to do some paper back testing in off hours, anyone can do so. It would more consistantly catch all possible/desired trades over whatever time period chosen. Just my preference. But go for what you are doing and hope to see some good results.
I also stuck my nose into the TK method and it has some appeal also. Need to finish documenting the rules into concise document then manually backtest it a few days for better eval. I think that system could be an EA more simply than other methods and I also wonder if some of Spud's methods could help with filtering.
  • #1,452
  • Jan 15, 2009 4:43am Jan 15, 2009 4:43am
Quoting mooselover
I also stuck my nose into the TK method and it has some appeal also. Need to finish documenting the rules into concise document then manually backtest it a few days for better eval. I think that system could be an EA more simply than other methods and I also wonder if some of Spud's methods could help with filtering.
I like that - better not committing oneself to all and do in the end nothing - fully understandable.

By the way - I did not get around to look deeply into TK's method as I focus on Spud for the time being.

But I would appreciate to hear about your findings.

All the best MJ
__Thanks__ MJ
  • #1,453
  • Jan 18, 2009 7:05pm Jan 18, 2009 7:05pm
I'd really like to know if Spud will return and continue this thread? Does anyone have any news from him?

SPUD: Are you coming back?
Just focus on the pips. The rest is insignificant.
  • #1,454
  • Jan 19, 2009 12:33am Jan 19, 2009 12:33am
Quoting ayaz
I'd really like to know if Spud will return and continue this thread? Does anyone have any news from him?

SPUD: Are you coming back?

Last thing I heard was

Quoting Spudfyre
Not sure I could commit to such a project as I have several on the go. However, I wouldn't mind following along and taking a look at what you are developing..and thro wany comments in I do have.
I guess that most of what Spud wanted to say in this thread he did in the intens last few month of 2008. Properly is up to us now to implement it.

But from his comment I assume that he will lurck at the forum from time to time.


Also where is CindyXXXX and Sarah2000?
__Thanks__ MJ
  • #1,455
  • Jan 23, 2009 9:15am Jan 23, 2009 9:15am
  •  Trader#D5BA
  • | Status: Unregistered Trader
I just dropped by to say thanks to Spud and to Merlyn for their assistance. I have been trading the Thread in GBUSD since the beginning of January, and with an addition of the ADX have been quite successful. I have traded the stoch for over a year, never quite understanding it until these two gentlemen showed me the complete story of the stoch.

again, thanks for the time you all spent.

macK
  • #1,456
  • Jan 23, 2009 9:32am Jan 23, 2009 9:32am
Quoting macK
I just dropped by to say thanks to Spud and to Merlyn for their assistance. I have been trading the Thread in GBUSD since the beginning of January, and with an addition of the ADX have been quite successful. I have traded the stoch for over a year, never quite understanding it until these two gentlemen showed me the complete story of the stoch.

again, thanks for the time you all spent.

macK
TTFN Merlyn
  • #1,457
  • Jan 25, 2009 10:17pm Jan 25, 2009 10:17pm
Quoting ayaz
I'd really like to know if Spud will return and continue this thread? Does anyone have any news from him?

SPUD: Are you coming back?
I guess not
Time hides Nothing
  • #1,458
  • Jan 26, 2009 4:26am Jan 26, 2009 4:26am
Quoting M_j
Last thing I heard was



I guess that most of what Spud wanted to say in this thread he did in the intens last few month of 2008. Properly is up to us now to implement it.

But from his comment I assume that he will lurck at the forum from time to time.


Also where is CindyXXXX and Sarah2000?
HI Mj - still about sort of although I'm disliking Forex factory more and more by the day - I wasted a lot of time on here in the past and so lately have been enjoying focusing mainly on my trading...

I only really come on here to check the calender these days

Hope your EA is going well...

Havent heard any updates lately?
Time hides Nothing
  • #1,459
  • Jan 26, 2009 4:45am Jan 26, 2009 4:45am
Quoting CindyXXXX
HI Mj - still about sort of although I'm disliking Forex factory more and more by the day - I wasted a lot of time on here in the past and so lately have been enjoying focusing mainly on my trading...

I only really come on here to check the calender these days

Hope your EA is going well...

Havent heard any updates lately?

> I'm disliking Forex factory more and more by the day - I wasted a lot of time on here in the past

Sorry hearing that. Until now I find Forex Factory one of the better forums - I like that there is some supervision - so compared to other forums there is not so much scam around.

Well forums can take a lot of precious time - but to be fair one can also learn quite a bit. (for instance Spud's sharing was really good - just not sure if it works out in praxis)

I just joined because I was interested in Relative Strength Basket Trading System but enjoyed so much Spud's presentation that I never moved on to it.



> Hope your EA is going well... Havent heard any updates lately?

Yes, finished it more or less and I'm now in the testing phase:
you can find some updates here: http://www.forexfactory.com/showthread.php?t=144270


Actually a shame that most of the people moved on - I sent you too a PM to join but did not hear back.


Anyway, my opinion is that many traders are jumping from one system to another.

Like I said: I think there could be a real profit in Spud's methods - so I still hang in there for a while.
__Thanks__ MJ
  • #1,460
  • Jan 26, 2009 3:39pm Jan 26, 2009 3:39pm
After studying what Spudfrye has generously prepared for us to learn I decided I should help out and keep this thread alive one more post anyway...hoping Spudfrye would come back and keep helping us.

Here's the pfd of the Dynamik.

Steve
Attached File(s)
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