
The regular Stochastic Oscillator indicator and the conventional Exponential Moving Averages form the basis of the comparatively safe Combined Stochastic Oscillator/MA Forex trading technique. While the stochastic will show you the short-term overbought/oversold stages where you can enter a profitable pull-back trade, the moving averages can be used as a general long-term trend indicator.
Features :
- Rather reliable.
- Trading with the trend.
- It is not very easy to follow.
- No definite target/exit levels.
Strategy Set-Up :
- Any pair of currencies ought to function. For long-term trend discovery using Exponential Moving Averages, use the D1 timeframe; for short-term signal reception using the Stochastic Oscillator, use the H1 timeframe.
- To the D1 chart, add three exponential moving averages and set the periods to 50, 100, and 200.
- Utilizing the Close/Close price field, set the overbought threshold to 90% and the oversold level to 10%. Then, add a Stochastic Oscillator indicator to the H1 chart and set its %K period to 14, %D period to 3, and slowing to 3.
Entry Conditions :
When the long-term trend is bullish (the price is above the EMA50, EMA50 is above the EMA100, and EMA100 is above the EMA200) and the stochastic crosses the oversold level from below on the H1 chart, you should enter a long position.
When the price is below the EMA50, EMA50 is below the EMA100, and EMA100 is below the EMA200, and the stochastic crosses the overbought level from above on the H1 chart, it is time to enter a short position.
Exit Conditions :
There are no definite SL/TP levels, but the recommended risk/reward ratio is 1/2.
A rather tight trailing stop should be maintained.
Examples : Bearish trend⬇️
Warning!
Use this strategy at your own risk. sonynetbusiness.net can't be responsible for any losses associated with using any strategy presented on the site. It's not recommended to use this strategy on the real account without testing it on demo first.