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

Hi Nick,

Thank you.
I thought of making this strategy work on smaller time frames.
Current setup won't work well there, and, unfortunately, I haven't come up with a winning idea yet despite trying for several times to make it happen...
I'll take another look at it next week. In the meantime any feedbacks and suggestions are welcome!

Regards,
Edward.

Hi Edward,
I have really enjoyed reading though your website! I really like this trading system but I would like to use it on shorter time frames. I was just wondering what setting you would suggest for the RSI, stochastic, and moving average for some of the shorter time frames(hour,3hr,4hr) or if you have tested this strategie on any of the shorter time frames?
Thanks,
Nick

Edward,
thank you. I will try to use this on some not majors pairs like gbp/jpy etc... Anybody tried on those yet?
Looking on some majors, you really do not have a lot of opportunities for trading. Sometimes you have to wait up to 2 months to actually get into a setup. That is a reason I want to try on some not major pairs.

Erni

Hi Erni,

I see where your question is.
You don't need both Stochastic and RSI to be under 20/30 at the moment of entry. You just make notes of the facts as they occur, something like this:
- the price is above 150 SMA - check!
- RSI went below 20 - check! (here you leave RSI, it does not matter if it's above 20 by the time Stochastic gets to the check point. Leave it and move on to Stochastic)
- Stochastic cross below 30 - check!
Everything is in place, time to enter with a new candle open.

Best regards,
Edward.

Hi Edward,
I have looked at Eur/Usd and Gbp/Usd daily, and noticed a lot of following scenarios, where rsi goes under 20, and Stochastic is under 30, However when Stochastic crosses, rsi is already over 30. So with your statement: "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.", I was not really clear if we could take such a trade, or both rsi and stochastic have to be under 20/30.

Thank you

Erni

To set initial Profit target, look back at market waves, find major support / resistance levels - those are the tops and bottoms of the waves - and set your Profit target at those levels.

Then later you may exit with Stochastic cross (option #1 in the system).

Actually, we have recently discussed with my team that if Stochastic cross happened too soon and you feel that you can stay in the trade further, try adding some EMAs, for example, 10 and 20, or 20 and 35, or 20 and 50... plan exit on the cross of two EMAs.

Edward.

thanks for sharing this system....if i want to use tp, what would u recommend for tp...this is because i dont have time to move my stop...

ihm

Initial Stop is activated immediately once the trade is open. The stop is placed at the closest swing high/low.

Trailing stop is activated when Stochastic gets to 70 mark (uptrend) / 30 mark (downtrend). It requires moving the initial Stop loss to the previous price bar high (downtrend) / low (uptrend).

Trailing stop tools at brokers' trading platforms won't do the job.
You need to trail your stop by hands every day by moving it (as on the picture) below the previous day low.

Regards,
Edward.

HI EDWARD, THANKS FOR THE JOB DONE SO FAR,PLEASE I WANT TO ASK CONCERNING THE ACTIVATION OF TRAIL STOP, CAN YOU PLEASE TELL ME WHERE TRAIL STOPS START TO COUNT ,IS IT AT THE ALREADY ACTIVATED STOP LOSS OR AT THE EXECUTED PRICE? PLEASE EXPLAIN WELL WITH DEMONSTRATIONS.

Hi Igmar,
Your feedback is greatly appreciated!

It is not an easy task to suggest certain hourly (or less) Forex strategy, especially since I like daily charts.

Try testing next four forex strategies for trading hourly and/or smaller time frames:

This is a nice breakout system which requires hourly + 5 min charts. Breakout systems are very popular nowadays since breakout trading with the right approach is proven to be profitable.
Simple Forex breakout system

Next system is very good at picking winning entries and giving exit signals. It uses several indicators to confirm trading decisions and it combines them well.
Forex basic balanced system

This system requires a lot of mouse-clicking to pick the right chart, but once you're there, it reveals a fantastic entry opportunity and gives easy stop loss and exit targets.
Entry right on tops and bottoms

And finally Trendline breakout + Pivots trading system
Once you master trend lines and Pivots it is a beautiful trading strategy to make your morning bright!

Each and every strategy on this website has something to offer. Combining them will make trading even more successful!
Try with time not just to trade, but to understand the systems here, this will give you the power of knowledge to fine-tune your own trading approach and find the best Forex system that will make good money for you.

Happy Forex trading!
Edward.

Love the site. Thanks for actual, useable and understandable forex trading knowledge with no strings attached. Do you recommend any current favorite strategies for shorter time frames (1hr or less)?

Igmar

Thank you Forexnetworth,

Having a lot of good Forex strategies accumulated over the years and constantly working on new ones I do combine a lot of them in my own trading approach, so that my own Holy Grail :) trading system stands up for its name.

I and my colleagues would like to thank everyone for the warm friendly feedbacks and great questions!
Stay tuned as we will continue revealing new interesting strategies for you to test and trade!

Cheers,
Edward.

Hi Edward,

Thank you for sharing your excellent strategies with us. Have you given consideration to combining this method with your midnight trading strategy. Thank you.

Forexnetworth

A Full Stochastic is a universalization of the Fast and Slow Stochastic.

Full K% = N period moving average of the %K Fast
Full D% = N period moving average of the %K Full

Some more formula details here at Wiki:
Stochastic in Wikipedia
Thank you.
Edward.

HI EDWARD....YOU MENTIONED FULL STOCHASTIC.6,3,3...IS IT SIMPLE OR EXPONENTIAL? AND IF SO...IS THERE ANY DIFFERENCE BETWEEN THE TWO?
THANK YOU IN ADVANCE AND HAVE AN EXCELLENT DAY,
TOMMY.