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.


Share your opinion, can help everyone to understand the forex strategy.

Comments: 2
  • #2

    Oli (Monday, 29 January 2018 19:27)

    The strategy says "Buy when 2 Days EMA crosses 4 Days EMA from.." . Thats wrong, it must be "Buy when 6 Days EMA crosses 12 Days EMA from...".

  • #1

    Not for EAs (Sunday, 28 January 2018 14:01)

    Strategy is not suitable for EAs. Something is missing.

Stochastic Forex Strategies