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

Hi Andrew,

I'll return with a screenshot on Monday.

Regards,
Edward

Hi Edward,

First - a thank you. I posted a question regarding one of your simple strategies and am grateful for your reply. I'll give it a go.

I'm also trying out this strategy, which seems elegant. However, not a great start. I shorted the EUR/USD pair today (just after a new candle appeared at midnight) at 1.3030. For my stop, I placed it (I thought) just above the most recent swing high at 1.3115. Later this morning, my stop was hit for a loss of 85 pips.

Did I do something wrong ? Were all the conditions truly met for a trade ? Was my stop too close ? Or was I just unlucky ?

All advice gratefully received. Many thanks again.

Andrew

It can stay for more than one day.

Regards,
Edward

The open position must be closed in the same day of entry??? or I can stay with my open position for more than one day???

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Thomas
(mod)

See Post 28/02/09 05:06
Re: I tried and did not seem to work, will try again.

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Thomas
(mod)

Hi Edward, I came across this website last week and like what I see. I like this particular type of strategy because it is very similar to what I use at the moment. Currently I use Sto %K-13, Slowing 5 and now signal line, I prefer using candle patterns. Then I also use MacD 12,26,9. When ever the Sto is above or below 80/20 line, using candle patterns it is a entry depending on the trend. I also make use of Divergences. If u are familiar with the book "Market Momentum" written by Martin Pring you will know what I am talking about. The strategy works great on 1H (good hit rate and RvR)chart and especially on USDCHF because it generates a lot of opportunities. The problem I have is that I cant seem to get the same strategy to work on 5min GBPUSD. Can you perhaps give some advice on this, I will realy appreciate it. As said before I am doing well on 1H but would like to trade 5min as well because I have the time for it. The shorter the time frame the more the opportunities, more opportunities more growth. Here is a exaple of the trades I have done on USDCHF The red vertical lines is the losers and blue the winners.

I see, Paul
Use 7, 3. I've never heard of 7, 20 (e. g. when the second parameter is larger than the first one)...
however if too choppy for scalping, use 20, 3.

Kind regards,
Edward

Hi Edward-

NO , i do not want three separate stoch. on my screen !

I use Oanda platform , which allows only two sets of parameters. Why , I

do not know .

For 5 min. scalping should I use Slow Stoc. 7 , 3 OR 7 , 20 ??

Paul

Hi Paul,

Sorry, I'm confused.
Do you want to have three separate Stochastics with 7, 3 and 20 parameters?
If so, then your Stochastics on Oanda will look this way:
Slow Stoch (3, 3)
Slow Stoch (7, 3)
Slow Stoch (20, 3)

Or may be you meant that you want a Stoch (7, 3) with 20 level to measure oversold area?
If 20 is a level to measure oversold area, then you draw/highlight this level using a trend line tool.
Let me know if I got it all wrong...

Regards,
Edward

Edward-

The Oanda platform does not take 3 numbers on slow stoch.

I want 7 , 3 , and 20. Should I enter 7 and 3 or 7 and 20 ?

Paul

" USER " is right Awesome Oscillator is the best !

Fraser

Hi Fraser,

In general terms, in a ranging market RSI indicator is helpful, while in a trending market - not so much.
Failure Swing Low strategy was suggested for trading with RSI alone.
(reference: http://forex-strategies-revealed.com/advanced/rsi-fullstochastic/cpage-8)
For the current "Neat Entry Strategy" we use RSI combined with Stochastic indicator. That's why I didn't focus on Failure Swing strategy in the first place; however, it is a great piece of information that can be used to own advantage when trading with RSI indicator.

In addition, RSI below 30 and RSI below 20 make a difference. When RSI goes below 20 it suggests a much stronger "oversold" condition, plus it takes additional time for RSI to travel from oversold 30 to oversold 20 parameter; and, as we know, sometimes RSI never hits 20, which means there is no valid signal yet.

Overall, Neat Entry strategy is well balanced and works in both ranging and trending markets.

Best regards,
Edward

Edward -

On p .9 " User " suggested buying if RSI plunged below 30.. You replied that it would work in a ranging market but not in a trend .

( You also suggested a FAILURE swing low strategy) .

BUT , the entry RULE , in an uptrend states that you buy if RSI 3 is below 20 ! Please clarify .

Fraser

Hi Fraser,

It is difficult to suggest a set of rules for 1 or 5 min time frame. It'll be a totally different system. You would probably want to go from 150 SMA to something more flexible, like 100, 80 or even 50 SMA.
Also, you would definitely benefit from confirming a trend with a higher time frame.

Regards,
Edward