Forex trading strategy #6 (Double Stochastic)
Submitted by Edward Revy on February 28, 2007 - 14:36.
By doubling on Stochastic analysis we are doubling on trading accuracy... However, one should remember that with each new Forex tool added complexity can appear; and a very complex approach is not always good.
Strategy Requirements:
Currency pairs: ANY
Time frame chart: 1 hour, 1 day
Indicators: Full Stochastic (21, 9, 9) and Full Stochastic (9, 3, 3).
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Hi Lynn,
The stop would be below the most recent bottom (swing low) or top (swing high).
You may also try using this MT4 custom indicator for placing and trailing stops.
Regards,
Edward
Hi Edward,
Please just to clarify, what you are saying with the re-entries is that they are always in the same direction as the initial entry from the 21 period line? I.e. if initial 21 line signal is short (as your diagram above) then all further entries signalled by 9 line are also short sells? ONly exit all trades once 21 line crosses back?
Thanks, Matt
Yes, you've got it right, Matt.
Happy trading!
Edward
Hi guys,
Want to share a video with a good strategy example for the Stochastic indicator:
Enjoy!
Hello Edward,
I really enjoy your website. this strategy has restored my confidence in trading FX. I just had a question regarding this double stochastic strategy. Say the 21,9,9 stochastic crosses over and you get in. However the the other 9,3,3 stochastic is not agreeing with the 21,9,9. And the trade goes against you 60 pips. Should you still stick with the 21,9,9 until it crosses back over or should you wait to place an order after the 9,3,3 finally agrees with the 21,9,9? Sorry so long...just want to make sure I discipline myself.
Thanks in advance,
Darin.
Hi Darin,
Of course, if you use 2 Stochastic indicators, you want them both agree on the signal.
So, you check first the signals from 21, 9, 9 Stochastic and then turn to 9, 3, 3 to time your entry perfectly and enter as soon as both Stoch agree on a momentum and direction.
Regards,
Edward
Hello Edward,
This is Darin again. I wanted to thank you for your response to my previous question. I have just one more for you if thats ok with you. Would you recommend using the Fibonacci Retracement, Fibonacci Extension, or Pivot Points(daily,monthly)with this strategy or will that make it too complex?
Thanks Again,
Darin.
Hi Darin,
It wouldn't make it too complex. you just have to remember that Fibs and Pivots should be used for reference or guidance if you will, while primary signals should be taken using the original rules.
Regards,
Edward
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