159# Sexy Stochastic
Submit by JanusTrader
Indicators in use :
Ma CrossOver signal
Heiken ashi MA
The setup :
Plot 3 stochastics in the same window with the following parameters :
1st stochastic :(K%20,d%10,slowing 20)
2nd stochastic:(k% 50,d% 10,slowing 20)
3rd stochastic:(k% 5,d% 3,slowing 3)
Plot the Nonlagma V5 with the following parameters:
Colors : Yellow / Blue / Red
Width : up to you, I use 3 for better lisibility
Plot MA Crossover signal with the following parameters :
Those settings correspond to a signal on a cross of 5EMA (exponential) and
simple) applied on close price
colors : Blue / Red
Width : again up to you, I use 3 to get a big fat arrow that I cannot miss
Plot HeikenAshi MA with the following parameters :
Colors : Red / Royal Blue / Red / Royal Blue – or whatever color you like
You chart should look more or less like this :
Time frame and Pair
This strategy works on anytime frame and pair. There is a bit more in the exit strategy about this.
What you need to do is first look at the 20 and the 50 and see what they are doing. This is not necessary but when the 20 is above the 50 then thats our first hint the trend is up.
When the 20 is below the 50 then trend is down.
Sometimes, they are really close to each other which should make you cautious about taking trades.
You want the 20 to be crossed down with its signal line and the 50 to be doing the same. If both are crossed down with their signal lines then price is trending down and we look to sell.
Vice versa for when they are crossed up.
Third indication :
The NonlagMA is flat or is trending in direction you plan to take the trade (blue for buy, red for sell ).
Taking the trade:
When the 20 and the 50 have crossed their signal lines down, we look at the 5.
We want the 5 to go into overbought if the trend is down. Basically we are looking for a pullback. When the 5 cross back down, we then either wait for the nonlagma to change color or go trendy in direction we will take the trade. If a nice tiny little consolidation formed and 20 and 50 are trending down and nicely then enter at that even if the 5 didnt make it very high.
If this setup is confirmed, we take the trade at the end of the candle.
Here is some examples :
Rules are exactely the same but you completely ignore the 50 and focus only on the
stochastic 20 and 5.
Compare the following chart of a trade on €£ with the previous one.
The red circle shows the aggressive trade based only on the stoch 20 and 5. As you can see on the stochastic window, the 50 are conflicting with the 20, yet the trade is very
good and produce much more pips than the trade circled in green.
The exit is in fact the place where you are pretty free.
Here is 3 different strategy you can use :
1- MA Crossover
My strategy is not the best but it gives repeatable results which is what everyone should focus. The good point is that it is simple to follow and apply.
The MA crossover signal gives you the exit. Plain and simple.
On a buy order, wait for the formation of a red down arrow and exit at the end of the candle (or before if the trade is really going against you )
On a sell order, wait for a blue arrow.
2- Change of direction of NonlagMA
You exit when the Nonlagma change direction at the end of the candle.This exit strategy is not tested.
3- 5 cross
You exit when the 5 cross again on the other side. So if you picked up a cross on overbough, you sell on the cross on oversell.
Usually doing do gives a very good Win/Loss ratio but risk/Ratio is not as good as the
Macrossover exit rule.
Also, it might be difficult to determine a good cross vs. a bad cross. A bad cross will let you forget many pips and the table.
Share your opinion, can help everyone to understand the forex strategy.