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Advanced system #3 (Neat entry: RSI + Full Stochastic)

Current strategy has won the hearts of many Forex traders. And why not when it has a great winning potential.

Strategy requirements/setup:
Time frame: daily
Currency pair: any
Trading setup: SMA 150,
RSI (3) with horizontal lines at 80 and 20,
Full Stochastic (6, 3, 3) with horizontal lines at 70 and 30.

Trading rules:

Entry for uptrend: when the price is above 150 SMA look for RSI to plunge below 20. Then look at Stochastic - once the Stochastic lines crossover occur and it is (must be) below 30 - enter Long with a new price bar.

If at least one of the conditions is not met - stay out.
Opposite for downtrend: when the price is below 150 SMA wait for the RSI to go above 80. Then if shortly after you see a Stochastic lines crossover above 70 - enter Short.

Protective stop is placed at the moment of entry and is adjusted to the most recent swing high/low.

Profits are going to be taken next way:
Option 1 - using Stochastic - with the first Stochastic lines cross above 70 (for uptrend) / below 30 (for downtrend).

Option 2 - using a trailing stop - for an uptrend a trailing stop is activated for the first time when Stochastic reaches 70. A trailing stop is placed below the previous bar's lowest price and is moved with each new price bar.


This strategy allows to accurately pin-point good entries with sound money management - risks/protective stops are very tight and potential profits are high.

Current trading strategy can be improved when it comes to defining the best exits. For example, once in trade traders may also try applying Fibonacci studying to the most recent swings. This way they can predict short-term retracements and make sure they will not be pulled out of the trade early and will continue pursuing profit targets at Fibonacci extension levels.

Profitable Forex trading to everyone!

Edward Revy,

Copyright © Forex Strategies Revealed

could u advice me, how to setting that indicator...?.. 10q an advance...

RSI and Stochastic indicators can be found on almost any trading platform. The red highlighting we've added to our illustration is not a part of those indicators but rather a visual aid for readers.

So, you would open your charts and:
1. Add study - RSI with settings 3, 80, 20.
2. Add study - Full Stochastic with settings 6, 3, 3.
Horizontal lines can be added afterwards.

Hope this helps,

Good Day Edward Can i use these indicator in 4Hours chart
Yes, you probably can. I would suggest though running a test: watching both: daily and 4 hour chart for awhile and compare results. ...Well, and may be later you can tell us about the results in your next comment. Cheers, Edward.

Hello u told us when the price is above 150 SMA = uptrend
RSI Must plunge below 20 & Stochastic lines below 30
We should enter long

ok the quesion is
if the price is above 150 SMA = uptrend and RSI Must above 80 & Stochastic lines above 70 .... Can we go short

I would not recommend doing so. May be on the current GBP/USD chart it looks OK, but if you, for example, take another currency pair the picture would change... Take a look at EUR/USD pair I've just marked those trading "opportunities".


However, I would not insist that your theory is wrong. According to the first illustration it might be a profitable trading. I would suggest studying GBP/USD pair to see how much you can rely on such signals you've mentioned.

My main concept though was that we are choosing to trade with the trend and thus we only buying in an uptrend and selling during a downtrend...

thank you and good luck!

Firstly, I would like to congrats everyone who have contributed for this website. This is amazing. It has all the answers for my question as a newbie trader. Excellent stragies which are only available in costly books are now revealed. Thumps up for everyone. Good luck trading!.

The revealed strategies are simply good especially for a new comer in FX like myself. Great work guys.