Stochastic Buy/Sell Signals Forex Strategy

The Stochastic Buy/Sell Signals Forex strategy is designed to reveal overbought or oversold market conditions in existing trends and deduce buy or sell signals from this useful information.

Our strategy is favored as a result of its ease of use and high degree of accuracy.

Traders may want to examine short, medium and long term price setups depending on their goals.

Chart Setup

MetaTrader4 Indicators: CCwSF.ex4 (Inputs Variable Modified; KPeriod=30, Slowing=24, DPeriod=24), trend-power.ex4 (Inputs Variable Modified; PeriodStep=14)

Preferred Time Frame(s): 1-Minute, 5-Minute, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week

Recommended Trading Sessions: Any

Currency Pairs: Any pair

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Buy Trade Example

Fig. 1.0

Strategy

Long Entry Rules

Enter a bullish trade if the following indicator or chart pattern gets put on display:

  1. If the blue violet line of the CCwSF Metatrader 4 forex indicator breaksabove the 20.00 horizontal level as shown on Fig. 1.0, price is said to be driven to the upside i.e. a trigger to go long on the designated currency pair.
  2. If the blue line of the trend-power custom indicator stayssomewhat below the candlesticks as seen on Fig. 1.0, the overall market sentiment is said to be bullish, thus a buy trigger is said to be in the cards.

Stop Loss for Buy Entry: Place stop loss below medium-term support.

Exit Strategy/Take Profit for Buy Entry

Exit or take profit from all trades if the following rules or conditions takes precedence:

  1. If while a bullish trend is ongoing, the CCwSF custom indicator pops up a red dot on its dodger blue line while above the 80.00 horizontal level (see Fig. 1.0), bulls are said to be increasingly closing their positions, therefore an exit or take profit is duly recommended.
  2. If the trend-power forex indicator pops up a red line that gets aligned slightly above the price bars during the course of a bullish signal, it is indicative of a bearish reversal, hence an exit or take profit is advised.

Sell Entry Rules

Go short if the following setups gets displayed rightly on the activity chart:

  1. If the blue violet line of the CCwSF forex indicator dips below the 80.00 horizontal level as illustrated on Fig. 1.1, price is said to be dragged lower i.e. a trigger to go short on the currency pair of interest.
  2. If the red line of the trend-power custom indicator staysfairly above the candlesticks as exemplified on Fig. 1.1, the general market sentiment is said to be bearish, thus a sell alert is said to be in the offing.

Stop Loss for Sell Entry: Place stop loss above medium-term resistance.

Exit Strategy/Take Profit for Sell Entry

Exit or take profit if the following takes center stage:

  1. If while a bearish trend is running, the CCwSF custom indicator pops up a green dot on its red line section while below the 20.00 horizontal level (refer to Fig. 1.1), bears are said to be leaving the market more and more, therefore an exit or take profit is duly advised.
  2. If the trend-power forex indicator pops up a blue line that stays fairly below the candlesticks while a bearish signal is running, it is pointing to a likely bullish reversal, hence an exit or take profit will suffice.

Sell Trade Example

Fig. 1.1

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About The Trading Indicators

The CCwSF custom indicator is a modified stochastic indicator that gauges the relationship between a currency pair’s closing price and its price over a predefined time period.

It still shows us when price has moved into the overbought or oversold region.

The trend-power indicator is a trend-following technical indicator that determines the direction the market is moving.

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