17# Stochastic and Emas'cross Trading System

Time frame - Daily.

Indicators -

Stochastic (5,3,3)
exponential moving average.
12 Days exponential moving average.

Buy Setup - Stochastic(5,3,3) should be below 50.
Buy when 2 Days EMA crosses 4 Days 
EMA from
downside to upside.

Stop loss - Below low of the Entry day but it should not be more than 3 % from your entry price this is my way of using stop loss but you can use stop loss as per your risk appetite but try to maintain Risk:Reward ratio of at  least 1:3.That is if your target is 15 your stop loss should not be more than 5.

Target - Exit when Stochastic(5,3,3) reaches near overbought zone i.e near 80 if you are long.
Exit when Stochastic (5,3,3)reaches near oversold zone i.e. near 20 if you are short.

6 Days and 12 Days emas crossover provides early entry into the trend and stochastic helps to filter out false signals.


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Stochastic Forex Strategies