Cosgrove, do you only take trade setups when stochs are either on the ob/os area?
I tried taking trades when stocks are in the middle or 50 and don’t have good results.
Can you tell me what trade setup you are taking?? ropes, after clamshell, comb, etc?
Looks like we have a short setting up for USDCAD, except for the netting. The next step is to wait for D1 Stoch to go above 76.4 level and then cross down/below 76.4 level from above to initiate the sell trade? Let me know your thoughts on this USDCAD short setup.
Based on trading the W1 and D1 this has been the first trade since the start of the thread.
TimeFreedom
Hi Grob
In your post (199) you said
My thinking is that you should concentrate on the majors and expect no more than 2-3 trades per-month. These would be trades where everything lined up well and therefore the success rate should be very high. With decent money management you could expect around 250 - 300 pips per trade and hence a very respectable pip total per year. This is certainly what i’ll be trying to do
When you say everything has to be lined up well,
do you line up in an certain order like
1, look to see if there is a tight rope forming on the daily stochs then look at the weekly stochs to see if both are trending together.
2,Only take trade in direction of MMAs
3,wait for close above/below 23.6/76.4 to take the trade
4,stops within money M.
5, 2 lots first lot target 100pts second lot move to break even
and let it run.
your thoughts and anyone else`s would be appreciated
Thanks
This method only takes trades when the main stochastic (14 period) crosses either out of the oversold or overbought areas and the threads are in a rope and/or combed. Those areas are marked by the 23.6 and 76.4 levels respectively.
That USDCAD trade will take a while to mature imo. As for it being the first one where both timeframes agreed, there was a euro short not too long ago that was valid with the weekly/daily both down, took it for 70 pips before it started to fishnet and I got out.
blackdog
That sums it up pretty well. One comment i’d make is that from my experience of this method to date it is very rare to get a signal where the daily and weekly stochs line up. I think this is because by the time the daily has pulled back and then is returning to the trend, the weekly position is still turning and so the stochs appear to be moving against the main trend. Not sure what other people’s opinion on this are?
But as you sum up
went long EUR/USD on 14th at 1.4645, short USD/CHF on 15th at 1.0931 and long EUR/GBP at 0.7486. Also signal today to go short USD/JPY at 107.30.
Hi Grob
thanks for the reply and good calls on
your entries.
Hi
Very quiet here lately has everyone gone fishing/golfing or are
we all staring at the monitors for the next rope.
Anyone like to say if they have altered ingots original strategy
in anyway.
grob when you look at the ATR of say GU which today is 141 is that on a 14 day ATR.
And do you look at that amount as your first lot target and move to breakeven on 2nd lot.
Grob
I am also using ATR as the first profit target. I use a 10 day which looks at the alst two weeks action.
First profit 1 ATR, second let ride, tralling stops down by approximately the ATR amount, however I believe you are doing something more sophisticated. Is this so?
Working well so far on a short USDCAD trade.
Pelican
Pelican is trying to stitch me up here. I am a mere novice to his professional trader and he taught me everything i know!
The ATR method works well although i have been using a wider stop and setting the target further away (eg 1.5 * ATR) the reason being with the smaller number of trades you definitly don’t want to be caught in a wipsaw and can afford a bit more leeway as using low leverage.
I’m keen for people to keep posting ideas here as there is plenty more to develop with this method (Ingot might even put in an appearance!) I’ll keep popping back with ideas in any case and will pass on further wisdom from the mighty Pelican.
this is a bump
I hope we don’t let this thread die… Ingot54 (et al.) have created an incredible system here. I wish cgjedi hadn’t bailed out. I never got to download his indicators. They sound like they were awesome.
I’ve actually been following this system. Seems like its best to take trades in the same direction as the trend it’s currently in and/or the trend in the higher time frame charts. I also put my stops and swing high and lows. I set my target for the same amount of pips I’m risking on the trade. If my target isn’t hit then I follow the rules of Ingot and exit when I see netting. Haven’t traded it long enough or “correctly” enough to really make a judgment call. I do like that its a position trading system so you don’t have to constantly monitor the charts. However for those of you with an itchy trigger finger, don’t expect to see setups everyday, or even every week. I’ll post again later when I have more data. Happy trading everyone and thanks Ingot!
Hi Guys
Looks like you have done some incredible work over the past weeks since I have been absent. Some remarkable developments have come out - I don’t think some of you realise just what some of your strategies have actually hit on here.
I will be back over the Easter Weekend at some time - and will try to catch up with the thread a bit between now an then (without actually posting until the weekend).
In the meantime - remember Who it is “Who gives you power to get Wealth” as I read in one footnote on one forum - truly this is where it is at.
Easter is not just a time to paint the spare room and fix the fence and chicken coop!
It is a time to remember higher things - to reflect on how much God thinks of His Creation - us - enough to actually became one of us in the flesh, and prove His love for us to the death. Let’s at least give Him that much thought - and try to focus on it for a little time each day over Easter … even if we don’t do much about it on other days.
Awesome! … and very humbling.
For our friends of different faiths - I hope you guys have a great weekend too - and pause as well to remember the same God we all share - though we may worship differently.
All that aside - we are here to get a decent grip on this market thing. And we are only about half-way.
Bless you all guys
Ingot
Awesome to see you’re back, Ingot! Hope you have a wonderful holiday.
ingot welcome back.thanks to everyone contributing to this thread.it helped me get a system/strategy that works for me build on ingot and spudfires systems. now i am at baby step nr 2 to learn discipline ,having faith in yourself,and of course MONEYMANAGEMENT
Hi folks
I had intended to bring the thread up to date this weekend, but found it impossible to keep my promise. However, I will remain in touch now until my next step with you has evolved.
Looking through some great posts in the thread I found some of you struggling to throw off a short term mind-set - and that is OK - it is a big ask to move towards ignoring short-term positioning after working so hard to understand it, and indeed after perhaps achieving some success at it.
And it is also a big ask to move towards trusting the market to honour its promises over a longer time frame. Generally I see that you are making it, and have made it happen. Good on you for the effort.
This is a very quick stop-by to post my intentions, but I’d like to leave you with an analolgy which might encourage you through a little more enlightenment.
Imagine if you can a very large vat filled to within 20 inches of the top, of heavy, viscous oil. On the surface of this oil, there are many corks floating, out near the middle of the oil, and about 12 inches apart; at the edge of the vat are floating several more corks, some closer to the edge than others.
At the time we first study this large vat, everything is still - the corks are floating quietly in their places, and in fact, everything seems to be peacefully at equilibrium.
Without warning, there is a subdued splash (insert “bloooopp!” here to aid the imagination!) as a large steel pulley stationed above, slips from its attachment, and falls directly into the vat.
Suddenly the tranquility of the scene erupts and the surface of the oil moves violently, sending waves backwards and forwards from edge-to-centre-to-edge, forcing the formerly gently resting corks to move, crazily bobbing up and down with each wave of oil that passes.
The thick oil gives the impression of slow motion to the observer of this chaotic event, and the patterns of rising and falling can almost be predicted.
“Choas” … “can almost be predicted” … really?
Let’s slow the scene down, into true slow motion. And you already knew folks, that I was going to say let’s give each of the corks the name of a currency. Now, in our minds something is beginning to happen, I know.
You can see that the first wave of energy emanating from the point of contact the heavy pulley made with the surface. This has made the corks floating in the middle move quickly up and down as the wave passes by. But they don’t just stop moving … there is an after-wave too, and this, though a little lesser in energy, still causes the central corks to continue to bob up and down.
However, it is not finished … in fact it has just begun here.
We follow the wave as it moves with an increasing diameter out towards the edge of the vat, where it causes the nearest corks to suddenly rise and fall, before also doing the same to each cork in turn, before striking the edge of the vat and returning to the centre from whence it began.
But there are also some secondary waves moving about at the edge, and once the main wave passes by in slow motion, a rebound wave occurs, forcing the corks to once more rise and fall, this time in less orderly fashion, and certainly not with the same synchronisation as happened initially.
So we now have the picture of an initial wave of energy, then many waves of energy, moving around in a confined space, in lazy slow motion, chaotically raising and lowering each cork they touch.
To develop this further (I don’t mind if you are already ahead here, but stay with it) let’s assume the corks in the middle of the vat are the minor currencies, and the corks near the edge are the majors.
Moreover, because the wave of oil is moving in very gentle slow motion now, we can easily see which one of the corks will be the next to rise and fall. The slow motion allows us to predict order from the chaos.
Let’s take just three currencies - the USD, the AUD and the BRL (a minor or exotic currency - the Brazilian REAL).
Let’s put the USD at the edge of the vat, and the AUD further out - say 2 feet from the edge. And let’s imagine the BRL is sitting near to the middle of this big vat of oil.
Now let’s watch as the wave of energy passes by each one of these three corks. You can see the BRL gets quite a shake up initially, then begins to settle a little, by the time the wave hits the AUD and fairly soon after, the USD.
In terms of currency pairs, we see the AUDBRL affected first, then the AUDUSD and the USDBRL together. Then as the wave is reflected back from the edge to the centre, the AUDUSD is hit with a second violent move, and shortly after, the USDBRL and the AUDBRL are again moved - all relative to each other.
Now that is not too difficult to manage in our mind’s eye.
But if only that was all we had to contend with.
We have dealt with the relativity to each other of only THREE of the corks. In reality, there are a couple of hundred of these corks in there - all floating, and all being affected not by just the first wave, but by many waves as the action, rebound, reaction, secondary waves and so on all make their passes.
OK - we have the picture - all currencies behave and move in relation to each other.
We could say the waves are things like news or events which have a bearing on a currency, which affect its position relative to other currencies. Things like movement in interest rates, employment numbers, consumer information and inflation. Other large events could be things like trade figures, and current account deficits or surpluses. We know much of this.
So now - having this mental picture, how does it help us to view currency markets, and more importantly, trading time frames, because that is the entire focus of this thread - making the move from short-term trading to successful longer-term trading.
Take a break.
Man! I love this stuff!
And yes - it is nice to be catching up with family over Easter. I thought I would be kicking back and enjoying a bit of computing … but Mrs Ingot has other ideas and I’m certain it has been the same for many of you … at least I hope you have been as fortunate as I have been, having family to meet with and enjoy.
Back to the task at hand.
What we are looking for now is something that we can mentally grasp that utterly convinces us that the LONGER time frames are the way to approach currency trading.
The analogy of the movement of the surface of viscous oil might do that for us (referring now to my previous post).
How?
Well - some of the corks in the story were near the centre of the oil pool, and some were nearer the edge. The movement of the oil is much more rapid and violent near the middle, and this is where most of the action occurs. Not only does this area move more violently, if I may use that term, but it moves more often that the edge area of the pool.
So if we can, imagine the centre of the pool as being SHORT term TF and the edge of the pool as being LONG term TF.
In the centre, we see the little corks bobbing up and down rapidly, affected by every wave that comes along - almost unpredictable - and in fact, the short term moves are nothing but moves-within-moves, and may bear little relation to the overall movement of a currency pair - just choppy chaos.
Yes, eventually a short-term move WILL be the beginning of a move that actually turns out to be THE pivotal point of change of long-term trend, but there will only be ONE of these, because the LT trend will only change ONCE in every “Long term” by definition - else it is NOT a “long term” at all.
So what can be said for the “corks” out near the edge?
The facts are that once we are able to establish exactly WHAT that trend is, then it will maintain its trend until prevailed upon by some deep and fundamental influence, that will cause the turnaround relative to its peers. Everything else is just a short-term “wave” causing the bobbing of “corks” which are just short-term moves. Corks near the edge move more slowly and bob up-and-down less often.
Hope that is fairly clear.
Taking this a bit further - how can we trade something like this?
OK - forget about oil and corks now - we have called in a crane, removed the vat, drained the oil and recovered the pulley … and whatever else happened to fall into that oil over the years!
We have all understood from looking at the weekly and monthly Rainbow charts exactly what the LONG term trend is.
And by looking closely at such a Rainbow chart we see that the short-term moving averages that make up the red/yellow side, are much more rugged and “noisy” that the other side of the Rainbow.
Now it doesn’t take a lot to see that if we can buy in to the background trend (LT trend) at a strategic point, then we may have a little (or a big) windfall.
Hands up those who can accurately pick the top or bottom of a move?
No one … ? Good! Thanks for being candid guys!
So … if we can NOT pick a turning point, how CAN we benefit?
OK - here is where the Multi-TF Stochastics can assist. Knowing that the background trend WILL eventually assert itself, we watch the MTFS. When the stochs look like they are setting up for a move that will cause a GENERAL swing of price movement back into tune with the underlying long-term trend, we have action.
This is going to be a little riskier that before, and will require a smarter strategy that before. Remember those WIDE stops we discussed way back in the beginning of the thread? Well we are now going to need them.
We are going to back our judgement with a touch of courage. And I want you to feel the fear now, because if you do, and if you can pass this ONE test, you will have learned to trade, and you will have discovered something indefinable (for now) deep within, that no one can EVER take away from you.
Here’s how to do it.
We get our signal from the hook or peak forming on the stocks that someone is entering the trade with decent money. In fact it is likely the only clue we will get that this has happened. But we also see that the stochs are moving, in the Long term charts - monthly, weekly and yes, daily - to point to a bigger move.
At this point we may still see the daily and perhaps the 4H and 1H charts moving counter to the underlying longer trend, or they may not. In fact they can be doing anything - their action is irrelevant at this imminent point of change. Eventually they WILL fall in line.
So with this in mind, we begin to support the LONG TERM trend - even though initially it may mean carrying a loss.
We enter one position. And we have a 250 or even 300 pip SL.
“WOW!” … (I heard you say that!)
But remember we are not randomly playing the fool here - we are trading with an edge - in earnest seriousness. We enter one position and wait. The trade may swing in our favour, or it may not.
After the trade moves against us by 75 pips (an arbitrary figure - only experience with a specific currency pair will nominate a more precise figure for you - we could make this 50 or 100 pips) we enter another position … and wait … same story.
Another 75 pips and enter a third position. At all three entries, the SL should be placed at the SAME level - the first at say 250 pips from entry; the second at 175 pips from entry and the third 100 pips from entry.
Why are we doing this?
Because the stochastics, the trend and everything we have been watching is signalling to us that the trend is resuming. We have the luxury of having instruments that we can depend upon. (Remember the criteria for entry?)
If we did not have the signals - this strategy would not only be premature - it could be very costly. If we have followed our setup and read the signals, by this time the trend should be visibly in our favour, and the positions should now rapidly improve.
Once we have the trend in our favour of course it’s a picnic - you can scale in or pyramid or whatever you usually do in these situations.
Keep in mind you will now be riding this for a long and easy ride back to the “core” trend. And given that the trade may have gone against you initially, it is likely that you will have a much faster ride.
It would make sense to me now, knowing what the stochastics and the Rainbow are looking like, to really milk this for the 200 or 500 or 800 or more pips that it potentially will deliver.
You can see on your chart how far this has to move to remain faithful to its core direction. It’s OK to feel elated at this point. I would be for sure.
But what I hope to do now, is to uncover some trades where this may have gone wrong. While it is nice to spread this nicely on paper for you, we MUST learn to manage trades that do not fulfil their “duty” to the strategy.
And there may be a few of these. It is inevitable that one day we all will be involved in a trade where it seems like a return to core direction is occurring, but in fact it goes on to become a trend reversal - every trader’s horror.
We want to avoid this - or at least learn to manage it with minimal risk.
I do not have any examples readily at hand (prepared) so would appreciate now if I could hand the thread back to you for full participation. If you have seen such a flipper trade - please share it.
And if you have had the wonderful experience of having one of these trades come along for you - feel free to share that too.
In the meantime I will search for an example of “rogue” trades and try to discover what the signals were to avoid them … if any.
Sorry we didn’t get to revel in the victory of having that winning trade fill us with confidence - but it is vital that we also consider alternative outcomes if we hope for longevity in trading. And before we go too much further, I will try to come up with an example of what we have discussed in this post.
Get this right now, and you will have dozens of these each year to enjoy.
With very best wishes
Ingot
Ingot � great to see you are back on the thread! Fascinating stuff as always, a couple of questions/comments re the points you raise.
Question/Comment 1
Is this an expansion of the original approach of waiting for the daily stochs to cross back in line with the long term trend? (eg above the 23 line in LT uptrend) By expansion, I mean instead of waiting for the daily to cross 23/74, we adopt Spud�s tactic of looking for the peak as the signal (i.e. instead of crossing the 23 line we�d enter long when the daily stochs peaked in the oversold zone and the LT timeframes still suggested an uptrend).
This would mean that over time we�d get more pips as we are entering earlier. However, as your post suggests, we�d need more confidence in the method as there could be a longer period before the trend resumes its general direction (hence more time in the red before the pips start accumulating!)
As an example of getting in on the �peak�, look at the long EUR/USD signal around 18 December 2007. This would get more pips than entering when the stochs crossed out the oversold zone (around 27 December) but you would have spent a while in the red before getting a profit. For an even better example, look at the same pair from 24 May, with hindsight, a great trade but it would have spent a long time in the red before the trend resumed (about a month!)
Question/Comment 2
It would be great if you could share your thoughts on the current GBPUSD position as I think this would help our understanding of interpreting the charts. Do you still see this as a long term uptrend or do you read the signals as having shifted to a short position (or indeed has it entered a range given the comparable weakness of both currencies)?
The MAs on the monthly still look like an uptrend but the stochs and MAs on weekly and daily all point down. This is a similar situation to the USDCAD (but in the other direction). Over a daily timeframe my inclination would be to look for short signals but over the very LT, the monthly stochs could be turning up and soon signal a long trade??
In addition, would you agree that for the GBPUSD (and other spiky pairs), the level of volatility may require a SL of 300+ pips (and so equivalently lower leverage to cope with this)?
That�s enough from me! Looking forward to hearing others thoughts
First off, I just want to thank Ingot for this thread and great insight to position trading - your stories aren’t half bad either 
My take on entering positions is when stoch is near ob/os - it’s tight and starting to hook, then start looking at price action of the bar. Be looking for a shooting star, doji, hammer, key reversal, inside/outside bar. Place your entry stop/limit and go have a cold one…Cheers!
Ryan, I also took AUD daily setup from .9050 to .9240 until price action bounced off the daily mid Bolli band and I also realized the longer weekly trend stoch is still heading down. Still made decent pips, but I forgot to pay attention the longer term. Grob touched on this with his last post. My interpretation is - for the longer, more sustainable trades - view the longer term and be patient! I’m mainly saying this for my own benefit. Ingot is right - it’s difficult to de-program yourself from shorter TF’s.
