Advanced system #3 (Neat entry: RSI + Full Stochastic)
Submitted by Edward Revy on May 13, 2007 - 15:40.
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:
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Hi Jari,
You're reading it correctly.
However, there is no need to exit a trade sooner, although you may if you prefer to keep 200-300 pips, which is a good profit. Locking in profits is a good habit. You can always re-enter later on market retracement in the direction of the daily trend by using 4 hour charts momentum.
As you may have noticed, what on 4 hour could be a new entry/exit signal, on the daily chart is just a minor correction.
I'd recommend to seek entry and exit signals from daily charts - original choice. Then, for better accuracy, go to 4 hour charts where we need to remove 150SMA and focus on momentum, suggested by Stochastic lines cross.
Regards,
Edward
Hi Edward,
It's a good site thanks for all your help! do you know if we can dowload a Full Stochastic indicator for MT4. It looks to me better then the Slow Stochastic.
Regards
Peter
Hi Peter,
I wasn't able to find Full Stochastic for MT4, but I can say that (at least) Oanda's Full Stochastic graph is 100% identical to Slow Stochastic graph.
Regards,
Edward
Hey there " MR. EDWARD " . SIR !!
No wonder you call Advanced # 3 the " Neat Entry " as well as one of your favorites . I know you like the Daily , and do not favor short term trades, but I gave this a long test on Eur/usd with 1 Min Candles , NO SMA 150 , but adding ADX ( 10 ) at 20 or more value , and the results were remarkable !
Just one question. Why do you list this method under " Advanced " Methods when it is so simple ??
Clint
Thank you for your feedback, Clint!
It is quite interesting to read about 1 min trading, thank you for this addition.
The strategy is very simple indeed, but it's also advanced and neat in the way it performs :)
Happy trading!
Regards,
Edward
Hi Edward .
Using 1 or 5 Min. cand., Option no. 1 for taking profits gets you out too soon, using Stoch.
RSI 3 seems to be better suited for taking profits in SHORT term trades.. However , ( in an uptrend for example ) , instead of exiting
when the 80 line is reached , you wait for the RSI line to RE- CROSS the 80 heading down. Oftentimes , at that point , the Heiken-
Ashi candle CHANGES COLOR , or keeps same color , but flattens out , or develops a down tail, ALL signs of a change in trend !!
What do you think ?
Clint
Hi Clint,
Certainly looks good. I like the idea.
Thank you for sharing.
Regards,
Edward
Hello Edward, Never done long term trading before .
If using Daily charts, when do I look at the candle each day , PST ?
Paul