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.
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.
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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