Hello,
I developed a trading system that works well in trends and another one that works well in ranging price action but neither one of them work good in both. Here are the details, using only two indicators:
RSI 14
STOCHASTIC 17,4,3
TREND TRADING RULES
To Maintain an uptrend (even if its choppy), one of two conditions must exist at all times:
RSI above 50, or
STOCHASTIC above 20
To Change to Downtrend, both of conditions must exist:
RSI is below 50, and
STOCHASTIC is below 20. (Enter Sell Order)
To Maintain a Downtrend, one of two conditions must exist at all times:
RSI below 50
STOCHASTIC below 80
To Change to an uptrend, both of conditions must exist:
RSI above 50, and
STOCHASTIC above 80 (Enter Buy Order)
If the currency pair comes into a ranging price environment, Changing the buy and sell orders to opposite would work well.
RANGING PRICE ACTION TRADING RULES
To Enter a Sell order, both must be true:
RSI over 50
Stochastic over 80, but reversing.
To Enter a Buy order, both must be true:
RSI under 50
Stochastic under 80, but reversing
If the price environment changed to trending, reversing the buy and sell orders would work quite well
I developed a trading system that works well in trends and another one that works well in ranging price action but neither one of them work good in both. Here are the details, using only two indicators:
RSI 14
STOCHASTIC 17,4,3
TREND TRADING RULES
To Maintain an uptrend (even if its choppy), one of two conditions must exist at all times:
RSI above 50, or
STOCHASTIC above 20
To Change to Downtrend, both of conditions must exist:
RSI is below 50, and
STOCHASTIC is below 20. (Enter Sell Order)
To Maintain a Downtrend, one of two conditions must exist at all times:
RSI below 50
STOCHASTIC below 80
To Change to an uptrend, both of conditions must exist:
RSI above 50, and
STOCHASTIC above 80 (Enter Buy Order)
If the currency pair comes into a ranging price environment, Changing the buy and sell orders to opposite would work well.
RANGING PRICE ACTION TRADING RULES
To Enter a Sell order, both must be true:
RSI over 50
Stochastic over 80, but reversing.
To Enter a Buy order, both must be true:
RSI under 50
Stochastic under 80, but reversing
If the price environment changed to trending, reversing the buy and sell orders would work quite well
