Craig Harris Stochastics Method

chewz,

I was trading EU (and GU) under CH Stochastics method live on Friday, on one of my accounts. It was a very good day for this method indeed. These are my immediate impressions, reading your post.

First, aren't you on GMT+1, not GMT? Under GMT, your description does not match Friday's EU chart; under GMT+1, it does. You know what they say about the devil and the details...

More importantly, you seem to be breaking multiple rules, almost too many to count. The rules regarding:

1) CH entry criteria -- multiple rule violations in this category alone, incl. the basic Stochastic criteria
2) TP exits -- what's with 20 pips all the time?
3) recovery MM -- none that you mentioned
4) elapsed time while in a profitable trade -- too short
5) time of day -- apparently ignored
6) news -- apparently ignored
7) your total trading time -- far too long
8) valid trades not taken

Even one trading rule broken is one too many.

The one element where we don't have quite enough information is your SL exits. Even if they are consistently correct and disciplined (as they may well be), that merely helps you lose more slowly than you would otherwise.

If you've been trading in this way for 6-10 months (on demo, I hope?), I would say that you are spinning your wheels.

Why don't you post a list of your exact EU entries, exits and times of each on Friday, with or without a chart? Then I'd be able to provide more detailed feedback.

Ultimatum.... Exits: I don't know how much experience you have trading. Again, go back into older charts and look at the candles where the reversal happens. Look at the similarities which happen over and over. Look at the tails on the candles... shorter candles too. Studying old charts makes the difference in the # of pips you'll make. You'll develop a feel for it before long.

I'll use the 35 pip stop loss for emergencies... but I never allow a trade to go against me that many pips... but that is my style only.

Chews...... I always make money using this method. I admit I have made some personal tweeks for my personal style of trading... with experience you'll do the same. Use the template I posted above for a chart with Heiken Ashi Candles.

All my charts contain H.A. Candles, the TDI Indicator and 8,3,3 Stochs Indicator.... regardless of timeframe. Study old charts for entry and exits using those indicators and you'll see the flow...

Big E

nhct:

http://i30.tinypic.com/hx5i82.jpg.
All trades stochs angles are good, and I trade when a break of the MA has happened (if coming in from opposite direction). On the second buy trade (one which reversed 26 pips) my SL was below the original reversal candle and as my own rule a break of the ma also. And since a new signal also formed at that point, It was an exit and then an instant sell. I dont look at news times, because I've found them to go in your favour alot of the time.

I typically wont trade all day, just pointing out the trades that could of been taken.
My SL is at bottom of reversal candle - a few pips past it (unless MA isn't re-broken, I'll wait till it is).
I use stoch agreement.
TP exit at 20 pips, just keeping it basic how CH explained in free videos.
Time of day - I only trade London session

Also, this past week I've been using 5,3,3 stoch experimenting, it helps entries earlier, even going off a 5,3,3 do you believe my entries look correct? thanks
Hope this helps, what you think?

Hi Chewz, even though its early days for me using CH, I have been more than pleased with the results. I've been trading fx live for over a year and been demoing CH for a couple weeks now, going live this coming week.
I would not have traded the first two trades for the following reasons:

Trade 1-even though the angle is correct stochs are approaching oversold levels
Trade 2-you have initiated a buy here when stoch angle was suggesting a sell

I will not buy unless stochs are oversold (under the 20 line and angling up)
I will not sell unless stochs are overbought (above the 80 line and then angling down)

Until these conditions are met I wait until they are. I'm from Australia so I trade the London open using xaphod's most excellent template and trade for 3 hours tops averaging two trades rarely three and then call it a day.

Hope this helps

Pete

Hi Neo, what happened to the video's? I was planning on watching them, are there any others?

Hi there. I removed the videos out of respect for CH.

Best Regards,
NeoRio

@ chewz... Trading is really a game of chance. With this method you add to your likelyhood of winning but if price goes the other way...you lose.

Trade with the trend!...if it is time for a retrace...you lose.

Stochs etc are calculated from the price...

Look at a 15 min chart of the day.
Look how many small movements there are. Get in on the third candle of one and then it stops/reverses - you lose.
Look at the big runs. Hit one of them and you win big.

With all the little embellishments people are beginning to think that this is foolproof or could be if only they could find that little secret that Harris might be able to tell them.

Get back to basics, you might see it clearer.

Here is a pic of 22nd July a big run if you are up for London Open - Morning session marked by verticles.

If you missed that there are some smaller ones a bit later

Ignore the odd colours they are for other strategies.

@NeoRio... Could you direct me to your 'breakout' site please? I forgot to bookmark it.

@Cewz... How about 23rd for long moves?

I don't have a BO site, but if you join Lenny's Skype room I share tips and show people there.

Regards

Hi,
How can I join Lenny's Room please

havent been here in awhile. Is the CH METHOD working on a consistent basis?

Id love to join Lennys room as well. is there a link?

Warm Regards
Bullz

Does anyone have any hard fast rules about using the TDI when it hits the bottom blue line on a short. Top blue line for a long. Rules for entering.

I do look for stoch agreement and cross of red green on tdi. I've been looking thru charts and I see lots of times the price continues below the blue line for a very nice gain. Problem is I see times when it doesn't. I feel I may have missed the trade if I have to enter when the green line hits the blue. The risk may go up dramatically. I want to reduce the risk and just stay out if possible.

Maybe the kicker is to stay out when the red line hits the blue for a short and vise versa.

Any fast hard rules I'm missing??? Maybe like....never enter a short trade when green line has touched bottom blue.

Zaxmark1.... CH Videos are at the beginning of this thread and on page 144, post # 2152. If there are any videos that don't play it's because CH has removed them.

Cugir321..... For specific info on the TDi (videos), GO TO WWW.COMPASSFX.COM AND THEN TO ARCHIVES. There ARE MANY VIDEOS THERE ON IT'S USE and answers to your questions. Sign up for there free nightly video on the market too.

Big E

hi big E,

there is no archives. i looked under the site map here: http://www.compassfx.com/sitemap/

but no mention of archives related to TDI. could you please provide a link?


thank you,

samk090905,

http://www.compassfx.com/synergy/commentary.htm

There are about 9 videos on TDI / Traders Dynamic Index.

Here they are: http://www.compassfx.com/synergy/commentary.htm

Click Indictor training tos ee the video on this.

chewz, fwiw, here's my feedback on your trade entries and exits on Friday the 23rd.

Trade 1, short EU ~1.2870 7:15 GMT (-17 pips, ~45 minutes):

I was trading this live... at that time, this was not a valid short entry, even (especially) if it had gone on to win. ("Especially" because it's intermittent positive reinforcement that kills you slowly as a trader.) This is not a Stochastic pattern we want to see, before we can even start thinking about going short.

We care not just about the angle, which can and does change in a flash. We care a great deal about where the SS is within its own swing, its 20-30/70-80 or so cycle, which usually takes as long as several candles on M15 TF. Here it has come down from 80 to ~25 and is heading back up. If it's topped at ~40 and turned back down, that doesn't change this observation: a Stock pattern like that, all by itself, is a NO TRADE, a red light, a deal breaker for a short, period. That is, regardless of the status of any other criteria on your pre-trade check list.

Furthermore, within 4 candles / 60 minutes of a fractal low 1.2861, a standard 1-2-3 pattern formed, 61-93-66. If you really, really must go short because your life depends on it, you'd want to do it as close as possible to point 2, the bounce (lower probability but lower risk) or on a clear break (5+ pips) of 1, the low (higher prob. but higher risk). Between 1 and 2, the retest, is a no man's, or woman's, land, to stand aside.


Trade 2, long EU ~1.2887 8:00 GMT (+20, <1m):

A SAR (stop and reverse) on a valid opposite signal is often a good idea. Besides an RC break, it's a break above 2 in the 1-2-3. The problem here is with the "reversal" part. You would have entered on a pending order seconds after potentially high-impact EUR news... that's against the rules of this method. If you really believe that "I dont look at news times, because I've found them to go in your favour a lot of the time"... then you are not treating trading as a business, let alone a serious business.

Trade 2 Exit: If you find, after putting in extensive chart time, that 20-pip TPs fit your trading personality better than anything else, so be it. Otherwise, I'd strongly recommend that you take a look at having 2 identical entries (in MT4, anyway), 2 TPs and letting half your position run for at least an entire M15 Stoch half-cycle -- until it tops / bottoms out and, ideally, begins to turn in the opposite direction. Better yet, switch to 1H chart and watch for a clear (7-8 pips) break of an RC on 1H TF for your final TP. In this case, you were completely in and out not just within the same M15 candle, but under 1 minute... that's not necessarily a good thing, when trading this method on M15.


Trade 3, long EU ~1.2948, 10:30 GMT (-24, ~45m):

Again, this was not a valid long entry at the time, regardless of its ultimate outcome. Similar to Trade 1, based on Stochastic pattern alone, this is a NO TRADE for a long, period. SS has been in agreement with a short trade only, for the last hour.

The 10:15 GMT up candle is not RC, no more so than some of the previous 7 candles. Step back from your screens 10+ feet... what do you see? We see that EU has put in a 105-pip 75-minute no-retrace swing and is still forming a consolidation... a no-trade zone. My sense from the Skype room is that the urge to jump on a break of every apparent M15 RC, without paying close attention to where we are in the current price swing, in the current SS swing and in time, just might be the single biggest problem people are having with this method.

Even if had been an RC, the 10:30 candle broke its high by only 2-3 pips, depending on your broker. Not enough in my book. Stick to 5+spread... that's at least 6... for EU on M15, even more for EJ, GU, GJ. You'll more than make up the sacrificed pips on wins, in avoiding losses on fake RC BOs not taken.

Within 6 candles / 90 minutes of a fractal high 1.2965, a standard 1-2-3 pattern formed, 65-23-48. If you really, really must go long, you'd want to do it as close as possible to point 2 (lower prob. but lower risk) or on a clear break of 1 (higher prob. but higher risk). Not close to 3, no man's land.


Trade 4, short EU ~1.2924, 11:15 GMT (+20, ~30m):

SAR on valid opposite signal... good. Besides an RC break, it's a break below 2 in the 1-2-3. No more scheduled EUR news until 16:00 GMT (bank stress tests). OK to double the size on this recovery trade.

Also see "Trade 2 Exit" note above.


CH cautions against the use of SS (5,3,3) instead of (8,3,3) and I agree.

I have to tell you....thanks a million for this template!!! I added this chart next to the regular candle chart and it gets rid of all the noise. The fake outs. I can see myself picking up 10 more pips a day because of it.

Also, it seems that the heiken reversal candle is a little behind the regular ones. Do you use it the same way CH says to do it with the normal candles?....get a heiken candle reversal and go in on the next breaking heiken candle?

E/U did 40 pips already tonight...it's 7/25/10 at 8:30pm eastern time. should be a interesting night.

Tremendous work guys. I have just finished reading the whole thread. The videos I have seen many times before. I am having trouble entering the template and indicators, but the instructional videos no longer work. Any ideas?
Also, I live on the East Coast and work early in the morning (7AM) so trading the LO is a little problematic for me. How are you other East Coasters handling this?