Stochastic Indicator Strategy

Stochastic Indicator
Stochastic Indicator
Stochastic Indicator

Stochastic Indicator

The stochastic indicator is an oscillator that measures overbought and oversold conditions in the market. It helps us determine where a trend might be ending.

Setup

Stochastic Oscillator (14,3,3)

Entry

SELL when Stochastic moves up past 80, 90, then back to 80.
BUY when Stochastic moves down past 20, 10, then back to 20.

Exit

Close buy trade when Stochastic Oscillator hits 80.
Close sell trade when Stochastic Oscillator hits 20.

Stochastic Indicator

Stochastic Indicator

Currency Pairs

Any

Time Frame

Any

Stop Loss

Use the latest swing low as the initial stop loss for a BUY trade.
Use the latest swing high as the initial stop loss for a SELL trade.

Pros

Works well during a trending market.

Cons

Doesn’t work well during ranging markets. I recommend using the stochastic indicator in combination with other indicators to reduce false signals.

Backtesting

link -> backtesting results

Expert Advisor