Forex New 2014 Swing Trading System Using Full Stochastic (14, 3, 3)
riyoforex:
Any
Time frame:
Last week I tried exactly this on a M5 timeframe, more or less as some kind of scalping (on demo account).
Worked well in Sydney session but in London session it turned faster from overbought to oversold as I was able to generate any profit. As result, I had to wait for the next return and my loss became bigger and bigger.
Wouldn't suggest this on shorter timeframes, at least without other confirmation tools.
Trading stochastic on a shorter time frames is not safe at all
Also, stochastic in a ranging period is OK, but in trending periods can kill you in no time at all. It needs some other indicator to avoid that
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Forex New 2014 Swing Trading System Using Full Stochastic (14, 3, 3)
Currency pair:
Any.
Time frame:
Any.
Indicator:
Full Stochastic (14, 3, 3)
Entry rules For Buy:
When Stochastic has crossed below 20, reached 10, and then crossed back up through 20 – set BUY order.
Entry rules For Sell:
Sell when Stochastic has crossed above 80, reached 90, and then crossed back down through 80.
Exit rules:
close trade when Stochastic lines rich the opposite side (80 for Buy order, 20 for Sell order).
Advantages:
gives quite accurate entry/exit signals in well trending market.
Disadvantages:
needs periodical monitoring. Stochastic is suggested to be used along with other indicators to eliminated entering on false signals.