2# Stochastic Strategy Trading System

Stochastic overbought - Stochastic oversold- Forex Strategy

Submit by Forexstrategiesresources

 

Time Frame 4H, Daily, and weekly

In this system, we defined both long and short entries as well as exit orders. We also did some setup work to calculate a 16-bar (16,5,3,)slow Stochastic with an overbought level at 70 and an oversold level at 30. The setups, entries, and exits are defined next.

Setup

a) Calculate a 16-bar slow Stochastic.

b) Set an Stochastic overbought level at 70.

c) Set an Stochastic oversold level at 30

Long Entry Position

a) Check for %K to cross above %D in oversold territory (below 30).

b) Place a buy stop one point above the high of the setup bar. This buy stop will remain in effect for six bars.

Short Entry Position

a) Check for %K to cross below %D in overbought territory (above 70).

b) Place a sell stop one point below the low of the setup bar. This sell stop will remain active for six bars.


Exit Order

a) Once we enter a long position, we’ll place a protective stop at the low of the setup bar; when we enter a short position, we’ll place a protective stop at the high of the setup bar.

 

Profit Target 4H Time Frame 20-30 pips;

Profit Target Daily Time Frame 40-60 pips;

Profit Target Weekly Time Frame 180-220 pips.

Activate a move stop loss to entry point after 65% of the gain predetermined.

 

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Comments: 1
  • #1

    Bruno (Monday, 01 July 2013 23:39)

    What do you mean with "this buy stop will remain" ? Is this stop loss or stop gain ? Can you give a numeric example ?

Stochastic Forex Strategies