Trading Strategies

Stochastic Oscillator Strategy |Forex Strategy

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Stochastic Oscillator Strategy |Forex Strategy

Stochastic Oscillator Strategy- is an interesting system with a very low failure rate. It is based on the Stochastic Oscillator indicator, which signals a fatigue or a change in the trend. It means you almost always enter into the pull-backs, ensuring a fairly safe levels of stop-loss.

Characteristics of Stochastic Oscillator Strategy

  1. Simple to follow.
  2. Only one standard indicator is used.
  3. safe levels of stop-loss.
  4. Take-profit level is not optimal.

Strategy Set

# All currency pairs and timeframe should work but long periods are recommended.

#Add the Stochastic Oscillator indicator to the chart, set its period% K to 14, the period% D 7 and deceleration to 7, use the simple method of MM.

Entry conditions

  1. Enter Long position when the cyan line crosses the red bottom and both are located in the lower half of the indicator window.
  2. Enter Short position when the cyan line crosses the red top and both are located in the upper half of the indicator window.

Exit conditions

Set stop-loss to local maximum if operating length and the local minimum if operating shortly. The most favorable take-profit level is between 1 * 1.5 * SL and SL. Close the position immediately if another signal is generated.

Example

Stochastic Oscillator Strategy |Forex Strategy

5 Signs of this strategy can be seen in the sample chart above. All stop-loss levels are marked with horizontal yellow lines on the graph. The first sign is for the short position with the stop loss close; take-profit is attainable here. The second is the bullish signal, which happens to be a pull-back fake, but fortunately, the stop loss is quite small here. The third signal is not the actual signal, because it is the bearish figure in the lower half of the window and left the ed form. The fourth signal is bullish with the stop-loss quite distant, but even the most aggressive level of take-profit can work here. The final signal is for short position, with stop-loss small and has many places to a very beneficial TP configuration.

Ideally bullish and bearish signals should follow one after the other but because of the appearance of false signals (downward in half low and upward in the upper half of the window) is not always so.

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About the author

Saimon Akash

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