Forex trading strategy #14 (Stochastic + EMAs' cross)

Hello,
Just want to know how much profit % you got from this nice strategy ?

Hi Stephen,

I am sorry for replying so late and i am glad to know that you like this strategy.
I have never used global trader charts so i cannot give you a precise solution for your problem.

Try this - In observation period enter 5
In Averaging period slow enter 3
In Averaging period fast enter 1
(Please back test before using in realtime trading because as i said you i have never use global trader charts so i do not know whether the aforementioned setting will work or not.)

I hope the above solution will solve your problem.

Happy Trading,
Regards,
Arsalan

Hi Arsalan -
Thanks for sharing your trading method - the help is invaluable!
I have just recently started trading forex and want to keep it simple after learning some harsh expensive lessons on hang seng futures :(
Your strategy looks like an excellent place to start but i have one question:
I am using global trader charts and when i add a stochastic study i only have the option of Stochastic Slow and it asks for input of 3 fields: Observation period (1-300), Averaging period Slow (1 - 300)
and Averaging period Fast(1 - 300).
My question is how would i enter only Stochastic(5,3) as per your example?

Any help would be appreciated.
Thanks,
Stephen.

OK Thanks Arsalan. I appreciate it. Cheers.

Robin

Hi Robins,

Q.1) Can I enter a buy entry when the Stochastic is between 50 and 80 typically around 65?
A.Yes you can enter between 50 and 80 but be cautious because it will be very risky but with strong money management principles risk can be easily handled.

Q.2) Second, if I do decide to strictly follow the Buy Setup when the stochastic is < 50, but if only one of the lines is < 50 and the other line is just > 50, can this still be considered as stochastic < 50?
A.I consider stochastic below 50 only when both lines are below 50 but sometimes i break this rule when there is some strong supporting evidence like price is very near to support zone for long entries and vice versa.

Q.3 Is this strategy limited to the Daily time frame, how about 4 hourly? Is there a currency pair that suits this strategy best?
A.You can use this strategy for 4 hourly chart but i think whipsaws will be more in 4 hourly chart but still i think you should try it.I think Myronn's trend line trading strategy is best strategy for trading on 4 hourly chart. I use Myronn's for my trading and it gives me nice profit in intraday trading.

Sorry for replying so late.

Happy Trading,

Regards,

Arsalan

Hi Arsalan,

This strategy certainly looks good. I do have a few questions on this strategy.

First,the Buy setup should be when Stochastic BELOW 50. However from my backtesting experience with the Eur/Usd pair, I noticed to wait for Stochastic < 50 and for the EMA to cross up have limited entry opportunities. So the question is, can I enter a buy entry when the Stochastic is between 50 and 80 typically around 65? Because I noticed many but of not all buy trades can still be entered with nice profit opportunities when stochastics is between 50 and < 80.

Second, if I do decide to strictly follow the Buy Setup when the stochastics is < 50, but if only one of the lines is < 50 and the other line is just > 50, can this still be considered as stochastics < 50?

Is this strategy limited to the Daily timeframe, how about 4 hourly? Is there a currency pair that suits this strategy best?

Best Regards
Robin

Hi Walter,

The success rate of this system is more than 65%.I have been using this system since last 3 months and it is giving me good results.I use this system on my real account and it gives me nice profit.Since i am a Stock trader and not a forex trader i cannot tell you how effectively it will work for forex trading.First try it on a demo account then decide whether it is effective or not.

Happy Trading,

Regards,

Arsalan.

What's the success rate of this setup? Any test on this? Pls advise.

Walter

Hi,

For Buy Setup Stochastic should be BELOW 50.
For Sell Setup Stochastic should be ABOVE 50.

If you have more doubts then post it here i will try my best to clear your doubts.

Happy trading,

Regards,

Arsalan

Thank you Arsalan,
Is that correct: for a Buy setup Stochastic should be BELOW 50?
Same for Sell. True or typo?