Sign In with Google
Sign In with Facebook
Stochastic is a very powerful technical indicator with which it is not only possible to measure the relative speed of trend movements, but it is also possible to determine the more important thing, the trend direction.
However, when Stochastic is combined with the addition of a price trend candle, which by its nature is part of Price Action, then you simply get something great that is definitely worth having in any trading kit.
Strategy entry rules
Entering long positions
-Stochastic crossed the 20 level from the bottom up
-Last candle before crossing is bullish
-Low current candle is above current support
-If the above conditions are met, then enter long after opening a new candle
Entry into short positions
-Stochastic has crossed the 80 level from top to bottom
-The last candle before crossing is bearish
-High current candle is below the current resistance
-If the above conditions are met, then enter a short after opening a new candle
The above chart highlights a situation where the entry conditions were met, i.e. the Stochastic line crossed the 20 line from the bottom up, further the previous candle was bullish and its lower wick, i.e. the low of this candle was above the current support. An analogous reverse situation can then still be seen on the chart below.
With today's strategy it is possible, depending on the chosen time frame, market and timing, to achieve a success rate of 50% to 70%, depending of course also on the experience and skill of the traders, thanks to which it is possible in some cases to achieve even higher average values.
