On My Way To The Top

You're very rigth on this one!

This indicator is real brainless!

Its a good thing to watch this OsMA tough; we became friends this weekend..

Situation for the Brittish Pound Future(BPJUN11).

Note: I didnt update the colorbars so you can see clearly the situation as it appeared real time!

First vertical line: all lines from stochastics pointing up, but the action from the orange 5min Stochastics is already above the red line from the 15min Stochastics; weakening the situation.

Second vertical line: All lines pointing downwards but this a weak situation with all action moving AWAY from each other.

Third situation: First note that you cannot see the 30min line from stochastics moving up here but the collorbar shows you it clearly did at this point!!! All lines from stochastics are nicely placed on top of each other with values from the TF's increasing from TF's(5min) to higher TF's(H4). This is the situation I like most; they rarely let you down! I dont mind here if the H4 is allready overbought; it would make the case even stronger if the H4 was crossing from 50 to 80 though.

Situation for the SwissFrank Future(SFJUN11).

First vertical line: I didnt see this one life() so I'm not sure if all colors from stochastics were the same colors as you see them now on the colorbar. Its a strong situation with all lines from stochastics on top of each other, starting from lower to higher time frame. Perhaps the 15min(red line) is just below the white dotted 30min stochastics but thats fine to me..

Second vertical line: Most action pritty much the same as for the previous situation. Only difference here is that the white dotted 30min stochastics is allready oversold. I often take this trades as some scalp as its often a continution of some trend..

hi pmullin86,

despichtt has asked me for some alerter too - so to make it useful for both of you I will merge his suggestions with your Alerter ( not sure when ),

The reason is that in that way it is more tested and people can plot pictures of success and failures together with the settings of the alerter.

This will help all to improve their system.

That's why I prefer to have it all in one.

Cheers

I read about the conditions on the previous version; will start testing as well.
Its pritty much the same conditions we try to find.
Only the position of the individual lines from stochastics is different as is the adding of the H4 line so you never figth some major trend..
I like the addition of EMA's nicely stacked as well as is closing above some EMA one of my entree criterea.
Will study some more on the conditions.
I think we can build some very robust indicator for the whole story!!

Another strong situation for the Brittish pound: look at the lines from Stochastics all on top of each other from lower to higher TF on the last vertical line. Idealy, the 30min stochastics line should have had a bit higher valuation but like I said: I dont realy bother about milimeters as long as both 15min and 30min are between lets say 40 and 80 in this case..

I defenately want to see the 5min line from Stochastics coming from below both 15 and 30 min lines from stochastics though.

Result on the second Picture!

Maybe you can explain a bit more - maybe there are bit's I can inco-operate in the final merge.

You allready did:

7. (Option:UsePriceMAsFilter= true)

Means: e.g. Stoch direction up:
We check that the Price is above the MA1 and MA1 is above MA2.

I think its a nice condition that must be met before validating some trade!

I'm still studying the alerter; probably have some meaningfull ideas on the whole issue later on..

I meant if you have here some other requirements: for instance:

My suggestions:

1.
addition of a 3rd MA. maybe even more! optional to select like the 6 Stochs

2.
maybe the Price must be above make it optional


For your extra filter I would think about something along this lines for all 6 Stochs


ADDITIONS: ( guess to make it as flexiable as possible we need it separated for Long and Short: e.g below - it's not enough to say between:25-75)
// For a valid alert signal Stochs must be between High-Low EntryLevel
UseStochLevelFilter=true;
HighEntryLevel_Long = 60;
LowEntryLevel_Long = 25;
HighEntryLevel_Short = 75;
LowEntryLevel_Short = 40;


Well, I won't do anything today - I will probably also have to do first some other stuff for my own new test.

But let the ideas come

Situations for the EUR future(ECJUN11):

First vertical line: Strong line-up from lines, perfectly on top of each other from lower to higher TF. Its just the rope that didnt look very strong on this picture.

Second vertical line: not much space left before getting overbought but mind you, this is usualy heavy pipping time!

Third situation: 30min already overbougth; pritty much the same siuation as for the Swiss Frank I showed earlier. I like to scalp this trades..

They will surely come!

I'm going out for diner first; will study some more when I'm back..

I meant if you have here some other requirements: for instance:

1.
addition of a 3rd MA. maybe even more! optional to select like the 6 Stochs
I think this option of 2MA's is just fine for me but it would be nice to make it optional.
For the amount of lines I have to study again some as I buried the H1 in my charts. I have been studying the effect with and wthout it in the past and the thing I remember is that it kept me out of many good situations. Its offcourse also quite good to implement in the concept. Perhaps give it the same value as for the H4, not sure yet..
I stopped thinking 1 minute charts for some time ago but its very well possible to integrate some for scalping or for entering market. But than again: watching the 1min Stochastics also spooks me out of many trades(even more than for the H4).
Perhaps also make it optional; like it's possible in the indicator to select the lines from stochastics you want to use rigth now!

2.
maybe the Price must be above make it optional

I see in the indicator you can use PriceMAsFilter true/false. In this situation both conditions have to meet criteria and yes I think its nice to be able to choose between the conditions. For me its most important to close above some EMA; many traders use this criteria and I've read somewhere that 5 and 10 are among the most populare. I didnt test this but I assume you can allready make your own choises for the MA's in this section.


For your extra filter I would think about something along this lines for all 6 Stochs
Yes perhaps integrating H1 would even make a stronger case but than again takes away many(more) strong oppotunities.
Idealy, one could choose witch lines to use: like the way you can select them rigth now in the indicator.

ADDITIONS: ( guess to make it as flexiable as possible we need it separated for Long and Short: e.g below - it's not enough to say between:25-75)
// For a valid alert signal Stochs must be between High-Low EntryLevel
UseStochLevelFilter=true;
HighEntryLevel_Long = 60;
LowEntryLevel_Long = 25;
HighEntryLevel_Short = 75;
LowEntryLevel_Short = 40;
Perhaps be able to make conditions for each individual lines from Stochastics like:

Splitting MaxEntryLevel_Long into:
EntryLevel_Long Minimum
EntryLevel_Long Maximum

Splitting MinEntryLevel_Short into:
EntryLevel_Short Minimum
EntryLevel_Short Maximum

The problem will be flexible conditions for making calculations based on the position of individual lines from Stochastics; especialy when you like to choose between the 6 lines. Not sure..

Offcourse one could make some scenario like the conditions I wrote to you earlier. Than make option to choose for this conditions True/False. It will reduce flexibility but it would make a very strong option to use.. Will publish them as well in seperate message so we can discuss this with pmullin as well..

Considers the Live Candle ( Option: ConsiderOnlyClosedCandles=false)
Note sure what is best: as I understand it there are different disadvantages in whatever one uses
I would leave it for a start like that. (if you want we can discuss them here)

Its great to be able to choose here! I peronally like to see live candle as I like the signals early(you probably not to early anyway at all because some price change had to take place for the 5min to pull the other lines in position). If the candle that triggered the situation is growing out of control I like to jump in early as well..

My basic theory around the influence of strength from different TF's from Stochastics is following:
I like to see 15min and 30min stochasics both heading towards the overbougth/sold areas: thats were the real pipping is done, especially if you hit them deep into the 80's or below 20's for shorts. I have read many times on this action from traders and its true: those are generally the strongest positions for the lines.
The 5min stochastics will strengthen this moves from 15 and 30min Stochastics if the drop started above the 15/30 line for a short trade and below the 15 and 30min for a long trade.
The position of H4 is for always playing inline the global trend.

Thats all you need for a good living!

Many traders will say when 5/15/30min lines from staochastics are almost overbougth: there isnt much room to go for. Well.. I'm not one if them: I migth burn my fingers sometimes but even more times I hit the jackpot! And more often: its comming fast to me as well..

The general conditions from 5/15/30min and H4 lines from Stochastics I consider as strong setups:

For long trades; all lines pointing up and:
-15min and 30min Stochastics between 35 and 80;
-5min Stochastics between 20 and 80 and value of the 5min line has to be lower than the value of the 15min and 30min lines from Stochastics;
-H4 has to be higher than 50(and also pointing up offcourse). I dont mind if its overbought.

For short trades; all lines pointing down and:
-15min and 30min Stochastics between 65 and 20;
-5min Stochastics between 20 and 80 and value of the 5min line has to be higher than the value of the 15min and 30min lines from Stochastics;
-H4 has to be lower than 50(and also pointing down offcourse). I dont mind if its oversold.

I'm open for adjustments offcourse; please let me know what you think of the conditions. Its a bit of a shame I lost all charting from before previous months when this new future started last week so I have to install some new account to check the common currency pairs(still didnt manage this connection between my Broker, IB, and MT4; its horrible to connect..). I migth adjust some myself as well for the conditions I wrote. Also take a good look at the H1 again for integration.

Will let you know tomorrow(tired..)!

Hey Mark,

Very good post...you pretty much summed it all up in this one little post...thats everything we are looking for in the mtf stochastics as far as the trend strength goes and of course like he said this is not written in stone at all as there are so many ways to play on the stochastics but as far as the o/b and o/s goes...its like you said and like Spudfyre always said...the stochastics are tricky beasts above 80 and below 20 but more often times than not...you really will find a pot of gold if they are all crossing over the 80 or 20 level around the same time...I don't know if you look at the daily or weekly stochastics at all but this is especially the case when they are going up or in the oversold or overbought position with everything else...very good trades and excellent pips just like Despichtt has stated in this...

Keep it up...!!!

Thanks


Paul

Well, I should be asleep but I ended up waking up after taking a little nap and decided that I would come on and take a look at the higher time frames to get an idea of what the trading day for tomorrow 03/22/2011 may bring...and what I'm seeing here is on the EUR USD 4 hour chart we have clear bearish divergence with the Osma clearly showing momentum slipping to the downside...the last two 4 hour candle closes both being indecision candles...doji's or spinning tops whichever they both show indecision...I'm also seeing a confluent fib level where the fib extensions 178.6 and 261.8 fib extension levels are confluent with the top of the ascending channel...at approximately...1.42496...so this is an area of high resistance...especially with the 4 hour daily and weekly stochastics overbought for a while now...price is about 25 pips away from the reversal zone on the 4 hour chart...while price on the daily chart has just closed above the 178.6 fib extension level and may be targeting the 200.0 fib level which is confluent with the high from november 4th of last 2010...there also seems to be a resistance turned support from the daily swing high of october 14th 2010...price is about 68 pips from the confluent 200.0 fib and resistance double top level...and we may have bearish divergence forming but it is not yet confirmed on the daily chart...the 4 hour daily and weekly stochastics are all oversold...so this may be kind of tricky as price may still want to go up...but we will see...although I'm looking at the weekly chart and the resistance level coming up on the daily chart...is a very strong level that is significant since 1992...but remember resistance and support doesnt have to necessarily take effect with price actually touching that level as price can bounce or other traders begin to start taking profit pips away from that level and the opposite team be waiting for the taking profit to begin to start adding to that position and begin the sell off...so I do believe many sellers are waiting here...

P.S...on the 4 hour chart there seems to be a moving average bubble as the red lower time frame moving averages seems to have moved away from longer time frame moving averages the blue moving averages so that is another indication of price maybe exhausting itself on the up move...


Paul

EUR USD 1hour chart showing bearish divergence as well and a beautiful 1 hour pin bar off the top of the 1 hour channel confluent with the channel on the 4 hour...

Oh and I'm bearish on the GBP USD and the AUD USD as well...they are pretty much telling the same story with bearish divergence on the higher time frames off of a significant level..its the same patterns over and over in the market like I keep reiterating...

The AUD USD is looking very juicy to me though as far as my bearish sentiment especially since the daily stochastic is in no man's land and the weekly is heading down...the 4 hour may turn down by london session or u.s. session so I'm going to keep my eye on it in particular for that sell off...but who knows it may not even happen...


Paul

We have a bearish butterfly on the H1 and H4 charts as well...which are very high probability reversal patterns...we always want to use all or most of our tools whenever we need them to be sure to get the entire picture of most of the picture that is being painted...price still may not reverse though..but we just see what happens...

Paul

I just took note to bullish divergence on the Aud Usd one hour chart but no bearish divergence yet...so price may not be quite ready to fall as of yet...

Paul

Yes, you're very rigth about this one on chart. Its just that markets keep pushing them higher!
I think it has lots to do with Japan: fact that they migth not buy that many bonds in future(or selling current positions), making weak case for the dollar.
Do you implement any of the news as well in your strategy or do you ignore most of it?
Sometimes I think I shouldnt if read it at all; having diffuculyies beleaving contra direction afterwards. At the other hand it can bring you some nice momentum as well!
Its this twist in me..