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DislikedSpudfyre,
Thanks. Great insight into Stochastic. I am fan of stohastic. That is my no. one indicatore. Would you care the post your template?
thanks and regards,
Vasu.Ignored
DislikedLike everyone here, I have and still do explore every system I can find....heck if there is an easier and better way to make pips, I'm game. Until then....
This is for GBPJPY only. I have never tried this on another pair. Although it should work on any pair, I like the GJ pair the best for personal reasons.
I set up 15M,30M,1H,4H,Daily,Weekly charts. I put Stochs 5,3,3 on each chart.
Note: DO NOT use the MTF stochs indicator on one chart as you cannot follow what the stochs are doing in detail. There's more, but stochs are the most important.
1st rule: Forget the crossover as an indicator of stochs. You can use it to support your decision but it is not your trigger.
2nd rule: Do not guess what the stoch will do. I got really good at stochs and began to think I could guess when price and stoch would make a move....gawd did I get burned. Wait for it.
Reading the stochs takes practice. If you think you can read this and go trade it, forget it. Just sit there and watch the stochs all day and what happens with price. This by far will eventually become your #1 indicator...your brain, so you have to practice to be good at reading stochs. I watch stochs and price 2 hours everyday and don't trade. It's like practicing a sport....going to the driving range to hit golf balls, and so on. If I don't practice, I get rusty and make mistakes.
You always WANT to trade with the daily trend...but CAN trade against it. In otherwords, if you want to be conservative, just trade the trend. If you want to play, trade against it. Trading against the trend is for small pips only...forget about chasing the 100 pip gain....it's a tempting carrot to chase the reverse breakout....don't do it.
Everyone will tell you that the long term is your trend. However, the long term is built by the short term. It's like building a house; the 15M are your nails, the 30M your wood, the 1H your walls, the 4H your finish and the daily your view of what you built. You need all the pieces to build it.
However the Daily never varies too much...a house is a house, it just appears different...more walls, different finish, etc.
So you know that when you look at the daily it is generally always going to come out the same. As in Forex, when you look at the daily chart the set trend is generally where the price is going.
Stochs are tricky beasts above 80 and below 20. Let's go with a long that just went above 80 on the stochs. What happens if the price just keeps going up. The one thing you will notice is that the stoch will not plaster itself up against 100 and go flat along as price goes up. What happens is that as price moves up the stochs don't gain much, they resist going to 100. On the other hand a down move will significantly impact the stoch move down. This is why you see stochs (most of the time) blip above 80 and then turn back down (in a long trend). Do the math if you like, but just know this.Ignored