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Forex trading strategy #27 (MACD + Stochastic daily)

Submitted by Arsalan

Hi friends,
Here's a new strategy which i have started using recently. This is a very simple strategy and it requires two simple indicators i.e Macd and Slow Stochastic.

Time frame - Daily.
Indicators - Macd(8,18,14)
Slow Stochastic - 10.

BUY SETUP- a) Slow Stochastic must be below 80
b) Buy when Macd gives a buy signal.

SELL SETUP- a)Slow Stochastic must be above 20.
b)Sell when Macd gives sell signal.

Stop loss - Keep stop loss according to your risk taking capacity. I prefer keeping stop loss below the previous swing low if i go long and above previous swing high if i go short.

Target - I prefer using trailing stops to exit my trade because it helps to capture maximum profit. Other method of exiting a trade is to exit when the price reaches near support/resistance area and stochastic is in overbought/oversold zone.

I hope i am not disappointing you Edward by posting this system which is similar to other systems on your website. I know this method is very simple and similar to other systems on this website but i have got amazing results from this system. I hope you will like this strategy.

Happy Trading,
Regards,
Arsalan

View other strategies by Arsalan:
EMA cross + Stochastic
ADX+EMAs cross system
ADX + MACD
System Selection Technique with ADX



Dear Arsalan,

I highly value your contributions!
Many simple strategies are similar, because they are SIMPLE and use common tools.

Thank you once again and Happy holidays!

Edward

Hi Arsalan,

Have you ever thought about combining this strategy and your last one - EMA5+EMA13+Stoch? That is how I trade H4 and daily charts! If two the signals by EMAs + Stoch + MACD match then it is a sure trade.

Regards,
Indrek

Hi Indrek,
I really like your idea about combining those two strategies and
I agree that Emas + Stoch + Macd will give good signal but i prefer using no more than 2 indicators in my trading because less indicators = less confusion.
Simple trading systems are best.

Regards,
Arsalan.

HAPPY NEW YEAR,

Arsalan and all others!
What I suggest can be done using only two indicators. If you use MACD 5,13,5 or 5,13,14 or whatever then EMA5+EMA13 are already included ;)
As I am a multi-timeframe trader, I add another timeframe dimension - trading H4, I watch also MACD and Stoch from daily chart.

Indrek

Thanks guys for your trading system,and to Mr Edward you have been of good help to me and many others.thank and Happy new guys.

Hi Arsalan,

From what I have observed in the last few months of demo trading, if I wait for the MACD to cross after the stochastic cross, I miss majority of the movement and am left with the last bit of movement approaching a support/resistence. Does anyone else agree, any suggestions?

Parag

can you please specify the stockastic 10? is it 10,3,3 or is it 14 ,3,3....plaese verify ..
winny

Hi Winny,

it's Stochatic 10,3,3.

Best regards,
Edward