Craig Harris Stochastics Method

Hi Craig,

I wrote in your blog last week and suggested that you come on over to to this thread. I am so glad you did. Many of the traders here have learned so much from your methods and it has changed the way I trade forever. I think I can speak for many of the members in this blog that your insight and suggestions will be greatly appreciated.

Once again, welcome!
Dan

Hi Sedak, assuming that the trades are marked with 'red arrows' and were buys, I would say that the first should have been five bars earlier when stochs were in right place and second should not have been made, you should have already have been in the first trade. Stochs were rolling along 'overbought' which does not mean anything other than 'stay out'.

They looked like winners to me!! Am I seeing them wrong?

A second look tells me that the first was a sell but was taken with PA wrong. Check the five bar reversal idea. Pivot bar, confirmation bar, trigger bar. Simarly the second trade.

Need more details Sadak, sorry.

I think sedakensearc was talking about two short trades.
We had red reversal bars and then a break of them. He marked with red lines those breaks. Unfortunatelly price after breaking the low of previous candle went higher.

Hi Sedak,

Both shorts were taken at the wrong time I believe. Please go back and review CH's videos... I believe that will help you.

Hi Sedak,

As I was explaining to Delta a few posts earlier, check your 15m 30m and 1hr timeframes for confirmation for your trade, nothing wring with going countertrend, but one must get confirmation first.

hlass

Sorry for confusion,
Trades marked with arrow is the area where i sold .
Price where i sold is marked with horizontal line(red).
I sold after breakout of reversal candle( red) and stochastic pointing down but prices subsequently went up . So both were losing trades

sedak

The info we've gotten on the pure CH method suggests you should be trading away from your moving averages, not towards them.
Outside of pure CH, check out the youtube info on bollingers that HLass posted. That info goes over when the bands are expanding away from each other and how that lets you know that the trend is continuing. The bands leveling out lets you know it might be ending. The trend in your trades was not ending.

Agent 6488.

Awesome, you got exactly what I try to point out to so many people, outside of the candles going outside of the bands and then coming back in and giving us a signal to get into a trade, the main thing I like I about boly bands is the position and look of them, no matter what the timeframe we are using, or if we are using multiple timeframes, the key is the look of these magnificent bollinger bands, if they are flat, then we are looking at possible consolidation and eventually a possible breakout of this consolidation and we just have to be patient and wait for this breakout, or if the bands are moving up or down then we are in an area of price moving up or down and thus look for an area to enter, either a bounce off of one of the outer bands, or a bounce off of the middle band, using stochastics can help but remember they lag like most indicators, but are one of the better indicators from what Ive seen, and ive used hundreds of indicators in my 4 years, ones best chance at a win is patience and watching price action with bollinger bands.
hlass

1) The particular swing of a m15 is about 30-60 pips. What is it on a m5, 1h, and 4h?

2) As a swing is often only 30 pips the entry is becoming key. Do you look for reversal pattern on a m5. If the distance to the low or high of the reversal candle is too high (15 pips) - the entry does not make any sense anymore. So it is probably necessary to monitor the m5 timeframe to get good entries.
How do you handle that? Do you look for confirmation of the H1, H4 - if their current swing is in the same direction than the m15 trade?



I am a trader that likes to be flat when I am done, so that means I trade for a specific amount of time. For most traders that is about 3-6 hours. (Be sure to watch my Free videos, specifically "The Survey Results" video) Click Here:

So for a quick answer: If you are trading on a time frame that is 1hr or less then the best look at the Natural up and down Flow of the Market is the 15min chart. BEACUSE you need to be able to have enough movement to go and get 20-30 pips per trade.....at a minimum. Any chart less than 15mins doesn't give you the Look at the 30-60 pip run that you need. Every time frame has it's own technical setups.......for 20-40 pips of profit........the 15min chart is the best.

Hence how much the 1hr and 4hr or even higher move is not so important to me, because I look for taking profits within the Natural movement in the market during EACH HOUR. It can help to trade in the same direction as the 1hr or 4hr. But for me that is not the most important because I Counter Trend Trade. If you don't CTT then you won't get many trades each day. The Market gives a Trade about once per hour, if you are willing to CTT as well as with the Trend trade.

3) If the reversal candle is narrow- and the previous candle big with high volume - is this the highest odds scenario for a trade?

If the above condition is true......then the real advantage is that you will have a smaller stop loss..thus less risk.

4) Do you work with volume data?

I never look at Volume.

5) In your live trading room. Do you post your own trades and can people trade the way you are trading. I think that is the best way to learn.I've been in another trading room and was kind of disappointed.

I do call most of my trades including entry, stop loss, take profit, even Recovery Strategy entries. But I am not providing a Signal Service. I teach you to trade. So because we examine the market........and before we ever take a trade we know all of the above, it is not as important to know each trade I take as I take them. You need to be able to see a trade and pull the trigger without me.

6) Do you have kind of an alert system for the highest probability setup.
I mean it would really make sense to combine all the factors and get alerts when they are lined up.

No alert system..... that is a Robot, EA etc. They don't work because the market is a live animal.......we can't make it move personally ever........ and you need to trade based on Price Action (what the market is doing now).

I do have a check list because you need to have a certain amount of confirmations. But to be a good trader, you need to understand Price Action within the Natural Flow of the market.

Hope this helps,
CraigHarris

Looking for the perfect setup i guess this might come close.
We trade away from the 240 and 20 MA , stochastics are in agreement, our reversal candle (here also the swing candle) is 1/4th of the previous candle,
TC is more than 40 pips also.
We also break some fractal resistance formed by the previous fractal high.

I guess it is pretty much important that the reversal or swing candle is smaller than the previous candle, because that shows that the sellers are caught on the wrong side. Also if the reversal candle is too big , then there is no more room for pips as the typical swing is 30 pips!


Thanks for your comments.

Hi Sedak, be sure to watch the Big Number Entry video. It will help you with the good entry problem. Some trades are just not going to work and you have to be willing to take the hit....and look for the new RC Pattern....and then close the original trade and get into the next trade.
Also Important to watch the SS and if you see oversold/overbought but for a long time.......over an hour or so........then you might not want to take what would be a counter trend trade, but instead wait for the pullback and then look for the next entry.

-CraigHarris

Thanks for your reply.

What would be the perfect relationship be for you regarding the reversal candle and the previous candle?
Isnt´ it the best setup if the reversal candle is also the sving candle and if that candle is narrow , let´s say about 1/4th of the previous candle?

If that previous candle runs into good support i see a high probability reversal.
In case of my posted setup this might be the case.
We run into support (previous fractal high) and also into the 2 MA´s. We would be trading away from the MA´s.

So screening for this pattern would make sense to me.

I think the distance from the swing low and reversal candle and the break of it
should not exceed 8 pips. So we would still have some room for 22 pips.

Is that correct?


Thanks

for the eur/usd, eur jpy, gbp usd , usd chf
it seems that the break of the 7.30- 8am GMT range is quite of an indication
for the direction of the day.

for USCAD i think the 13.20- 13-50 GMT time is more of an indication


do you agree here?


I also found out that the counter trend trade at the end of the UK session is really an edge and works well. Do you have a time stop if markets are really not showing any activity after you entered? If you don´t reach any profits at 7GMT would you close the trade?



thanks

Here another situation.
The down candle is about 20 pips. It´s kind of a momentum candle.
The reversal candle about 6-7 pips.
So that is an acceptable ratio.
We are just 8 pips away from the swing low in that case. Session timing is good and stochastics are in agreement. We are trading away from both MA´s and the move will be about 100 pips. There is plenty of support below our entry it appears.


Thanks for your comments.

Hi Craig, just wanted to give a shout-out and thank you for the free videos you have made available. Even just the basics of your free videos have been a tremendous help in understanding the Forex better and have put me on course to trading profitably for the first time. Thanks to Big E also for starting this thread, otherwise many of us might not have ever heard of trading with the natural flow of the market. Of the many trading methods I have studied over the last year, your simple but powerful method is the best I have seen--by far. Thanks for your willingness to share the basics for free. Hope you don't mind that we here have tried to emulate to the best of our ability a template that looks similar to yours. Look forward to seeing you around this thread and pointing us in the right direction...since after all, this thread is dedicated to your trading method.

Kind Regards,
Neo

What do you you think about this eur/usd setup?

Delta, I know it looks like a "perfect on paper" technical setup...but man, you have to step back just a bit and see the big picture. For one, PA had not begun yet for the day (I'm also staring at my screens right now). I find it risky to start taking trades when 1) you're in consolidation with no clear break out and 2) you are still within the Tokyo Channel. If you zoom out to your H1 TF you will see that we are seemingly heading out of a semi double top and heading down, out of consolidation. If you look at the H4 TF you will see further confirmation of a semi double top and also heading down out of consolidation. Then check the daily TF, you will see the same high price that we are currently coming out of on 2/16 and 2/17. Now look at your weekly chart and you will see that for past 4 weeks at least, we have been in a ranging area with dojis...and our current (new week) candle is at the top of that range area...heading down. So based on a quick 20 second "multi TF analysis", even for little old me, it's pretty easy to see we're hitting some decent resistance and should be (most likely) heading down. I entered an EU short at 1.3723, when it broke out of consolidation with the break of the reversal candle that broke the Tokyo Channel.

Hope that helps

Thanks Neo,
I didn't take this trade, just wanted to know what you're thinking about this kind of setup. I see that you also look at bigger time frames. Craig said that he only looks at 15 min PA.
Today i took gbpusd trade short when it broke BN 1.5150. It was a nice move down but got only 15 pips, was afraid of next BN 1.5120. It broke it easily and went down. now it may do a pullback.

Actually, Craig has said that at the onset of his trading day, he will study the higher TFs to see where we are in the larger scope of things...but then after a short analysis, he narrows his searching for trades and his trade entries down to the M15 only. This is how I do it and I agree that this is good counsel. What happens when you try to jump TFs during actual trade entries is that the indicators will give you different signals, the M15 might say one thing, the M30 might say another, etc. Of course when you get confluence across multiple TFs, it's great, but more often than not, hopping TFs can make your trade entries all the more confusing and difficult. Candle patterns also look totally different on different TFs. If you go back to the first page of this thread you will see a post by Big E where he posts a message from nick (from forex4noobs.com) where he suggests sticking to a single TF. I believe this is sound advice.

I like to start my daily analysis on higher TFs and then take notes on where I think we might be in a trend, range, etc. But when it comes to trading the swing method, you will only confuse yourself to be switching TFs all the time. Craig can correct me if I'm wrong, but I believe he mainly trades the GU...at least it's his #1 choice of pairs (it happens to be the #1 choice of most traders I know)...prolly cuz it gives such nice and healthy swings and PA. If you're concentrating mainly on one pair, then you will most likely know where you are in the larger scope of things more readily than when you hop around a lot. Hope this helps.

P.S. What I like most about CH's method is that it's simple to understand and doesn't take a lot of guess work. You don't need to learn Chinese to read his charts and understand what PA is telling you on the M15 and where your most probable 20+ pips swings will be.

P.P.S. I also took GU shorts tonight like you did; first one at 1.5148 for +70 pips and a 2nd position which is currently at +55.

Best Regards,
NeoRio

There is no perfect relationship for size of RC Patterns. If there was everyone would be trading that. The reason why there is not.....there are too many other variables like DR, Size of Last Swing, Time of Day, Session/s you are in, News just to name a few.

London Session is best for determining range but you can't make a determination of Trend for day or session based on a open or close of specific candle or even hour.....because of all the above mentioned factors.

For CTT I like it up to the N.Y. session close. After that market slows too much.