214# The Wallaby Trade Trading System
Three Stochastic trading method
Submit by JanusTrader
KPeriod = 7 Sets %K period for the three Stochastics
DPeriod = 3 Sets %D period for the three Stochastics
Slowing = 3 Sets smoothing average period for three Stochastics
Timeframe1 = 1, Timeframe2 = 5, Timeframe3 = 15 Configures the timeframe used to calculate every Stochastic indicator. Use 60 for 1 hour charts, 240 for 4 hours charts, 1440 for daily charts, 10080 for weekly charts and 43200 for monthly charts.
Based on the classic stochastic oscillator, this indicator has been set to average over three time periods, in an attempt to detect counter trade trades; however, the basic concept is to understand those movements as pullbacks that gave buying opportunities on deeps, favoring the trend trading.
The Stochastic Oscillator is set to 7,3,3 with levels at 20 and 80 to signal extreme readings, and based in short time frames by default. To trade in bigger time frames, the parameters need to be adjusted.
By itself, the indicator should give traders a warning sign of market entry once the price and the Wallaby are divergent, although it needs a filter that in fact generates the buy/sell signal.
Also, and as a classic Stochastic, cross over outside the extremes tend to signal exhaustion conditions and signal a reversal in the current dominant trend, accordingly to the chart under study: take a loot at the following USD/JPY 15 minutes chart.
A bit hard to read and understand at the beginning, yet simple when you dominate it; maybe not revolutionary, yet no doubts another of Rob Booker’s great trading tool.
Share your opinion, can help everyone to understand the forex strategy.