Stochastics

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Stochastics

Postby pikeysjnr » Sat May 08, 2010 1:28 pm

Hi there, sorry if this sounds a bit simple.

I am wondering whether the set-up values for stochastic are specific to the time frame of the graph, for example if some one was to give me the values they use for stochastic or macd that they were using on a 1 hour candle stick chart would the same values show me relevant information on a smaller time frame say 5 minute chart?

For example if i was trading using swing highs and lows and using stochastics and macd to buy into a trend would the values be the same for some one who was trading using a 30 minute chart and some one who was using the same methods on a 5 minute chart? Also would I benefit from keeping the values the same and then as the stochastics and macd line up get a chart up with minute candle sticks up to make them alighn in that also before buying ing? Or is this over complicating stuff?

Thanks in advanced

Simon
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Re: Stochastics

Postby JimmyMac » Sun May 09, 2010 4:19 am

Rom wrote:there seems to be cycles on M5, but these cycles are not tradable because of spread cost. You will need almost zero spread cost to trade such small cycles

When you use stochastics you are guessing minor tops or bottoms.
Stochastics on small cycles does not make your trading profitable.

I think perhaps a couple of the guys on this thread will strongly disagree with you on those points.
combination-strategies-t140-190.html

Utilizing that indicator as an aid to establishing entry criteria on the 5 minute timeframe chart is perfectly acceptable as long as you’re keying into the momentum in step with a clear & obvious directional bias, usually identified from a higher timeframe leader.
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Re: Stochastics

Postby JimmyMac » Sun May 09, 2010 6:19 am

Rom wrote:If I said something completely wrong ask them to explain what is completely wrong about what I said.

Where did I accuse you of saying anything completely wrong? :)
The comments you made are obviously based on your own experiences & beliefs.
Just because one or more people believe something can't be achieved, doesn’t mean it can't.

Rom wrote:Remember, 95% of traders loose.

95% of which type of trader?
new entrants?…intermediates?…retail?….institutional turned retail?….system traders?….discretionary traders?….traders who follow a well tested, disciplined structure?….
where’s the evidence of this 95% figure that relates to the sub-structures of the above groups?

Rom wrote:Remember swingtrading strategies has most of the winners.

Where's the evidence to support the comment that swing traders experience greater & more consistent profitability than day traders?
Our experience (when manning the desks at NewEdge) says otherwise.

Rom wrote:What we are left with is a couple of percents that are making money on daytrading.

How do you know what percentage are regularly returning consistent profits via daytrading strategies & models?….

I’ll give you an example of why & how that comment falls flat on it's face:
I work in an office with 17 other traders, 13 of which have never posted on any public trading forum at all, yet they all possess models/strategies that at some point during a typical trading month directly involves day trading.

They've all been here for a minimum of 4 years (8 of them in excess of 9 years) & all are extremely high achievers.
How would you include them in that 2% club if you didn't know anything about their regular trading activity??
And how would you determine the percentage ratio from all the other hundreds of intermediate & experienced traders who don't contribute to public boards or trade via retail accounts?

Rom wrote:Remember, brokers make most of their money on casino style traders.

Most brokers make their money via the difference in the spread costs they receive & pass on to their customer base & from their proprietary desk activities.

Inexperienced, ill-disciplined & clueless individuals who think they know what they’re doing also add to the brokers profit line, but that’s been the case for years & will continue to be going forward.
They’re not traders, they’re gamblers with no clue or no hope of ever making money betting on financial markets.

Rom wrote:Remember, casino style traders love simple systems, they hate homework.

Who says day traders don’t do their homework?….you’re generalizing again. where’s your evidence that professional day traders don’t research & analyze their structure?

Rom wrote:Real stuff does not sell very well

What's real stuff??
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Re: Stochastics

Postby jjay » Sun May 09, 2010 7:01 am

Rom wrote:
Remember, brokers make most of their money on casino style traders.
Remember, casino style traders love simple systems, they hate homework.

Could you maybe clearly define exactly what you mean by "casino style traders"?
And how does that comment in anyway relate to the strategy that Carll has clearly explained & presented in the post on this thread?
combination-strategies-t140-180.html
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Re: Stochastics

Postby jjay » Sun May 09, 2010 8:04 am

Rom wrote:Stochastics on small cycles does not make your trading profitable.

So I guess the above statement might be considered a little rash then?

Rom wrote:Yes, there seems to be cycles on M5, but these cycles are not tradable because of spread cost.
Indicators does not work for daytrading, they are blind, and you are following a blind, your illusion is that he is not blind.

Some of those so called cycles on a 5 minute eur/jpy & gbp/usd pair can print in excess of 50-60 pips in one mini leg.

It has been evidenced via several charts on that previously mentioned thread, that consistent profits are more than regularly available using indicators on a 5 minute chart if you know what you're doing & you use the tools & market momentum behavior available to you sensibly & professionally.

It's somewhat presumptious to paint everyone with the same brush don't you think?

It's not the fact that indicators + 5 minute charts are considered unreliable or unprofitable, it's the person trading those combinations that either make it a consistently successful operation or not.
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Re: Stochastics

Postby JimmyMac » Sun May 09, 2010 8:23 am

Rom wrote:The simple rational is what I said, brokers make more money on daytraders.

Wrong.
Brokers make (more) money out of those who haven’t got a clue what they’re doing.
They don’t discriminate between micro (day) traders, med-term swing traders or long range (macro type) traders.
Just because someone decides to trade a 4 hour timeframe based strategy, doesn’t mean they’re going to lose less money than someone trading a 5 minute timeframe based strategy.

Rom wrote:If your TP is 10 pips, your SL is pips, your winning rate is 60%, then your are heading for gross 2 pips/trade, i.e. spread cost will be 150% of your profit.

Who mentioned anything about stop losses & profit paring ratio’s??
Day trading doesn’t necessarily equate to tight stop losses & strict risk-reward ratio’s.

Rom wrote:I don't know much about India, but otherwise retail Forex trading is mostly amateurs.

What’s India got to do with anything?
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Re: Stochastics

Postby pikeysjnr » Sun May 09, 2010 11:12 am

Hi

I trade on the 30 minuite or hour candle charts and make 1 or 2 trades a day, I use the the 5 minute chart to buy in and exist the trend on the 1 or 30 minute charts. Within all the arguing has some one answered the question on stochastics? I use the 30 minute chart to spot the swing highs and lows of the day and the resistant level then set my trade up using the 15 minute and try and buy in with the 5 minute chart....can I use the same values for the stochastic in the 15 minute and the 5 minute chart as I try and buy in at the best time and add to the trend as well setting trailing stop loss on previouse highs of the 15 minute chart.

Cheers Simon
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Re: Stochastics

Postby JimmyMac » Sun May 09, 2010 1:30 pm

pikeysjnr wrote:....can I use the same values for the stochastic in the 15 minute and the 5 minute chart as I try and buy in at the best time and add to the trend as well setting trailing stop loss on previouse highs of the 15 minute chart.

you can do whatever you like as long as you test it out thoroughly first & it stands up to inspection.
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Re: Stochastics

Postby JimmyMac » Sun May 09, 2010 1:44 pm

Rom wrote:Your company had some office in India I noticed.

then you noticed wrong.
We have no association or business links in India & neither do we wish to have.
We're based in the US & trade out of 2 offices in the UK.

I think we'll leave you to your views & beliefs.

If you're unable to engineer & generate consistent profits trading off smaller timeframe charts utilizing a stochastic (or any other) indicator, then so be it.
You have to stick with what you know & that which suits your experience & skill levels.

But your views are simply that - your views.
Doesn't mean because you can't do something it's not possible for other folk.
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Re: Stochastics

Postby goldtop » Sun May 09, 2010 2:16 pm

JimmyMac wrote: I think we'll leave you to your views & beliefs.

That's a wise choice by the looks.
It appears he’s gone off on a tangent & hasn’t really grasped the point(s) you were attempting to make.
You're simply going to end up twirling round & round in circles :lol:
I'm sure there are far better things one could be doing with ones time.
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