THE STOCHASTIC TRADING STRATEGY

Day-Trading the Forex Majors using the Stochastic Oscillator and the Fibonacci Retracement


TRADING STRATEGY

Style: Day-Trade Strategy

Name: The Stochastic Day-Trading Strategy

FINANCIAL ASSETS

Forex Majors (Preferably EURUSD and GBPUSD)



TIMEFRAME

■ M5 time frame (5-Minutes)

■ 2-4 daily trades



INDICATORS & SETUP

This strategy combines the Stochastic with the Fibonacci Retracement

Stochastic Oscillator

-Settings at 5,3,3 instead of the standard setting (14,3,3)

Fibonacci Retracement

-Standard settings (.618, .500, .382 and 0.236)

 



TRADING SIGNALS

This is how you may implement the Stochastic Strategy:

■ First of all, we apply the Fibonacci levels and then we receive signals from the Stochastic.

1. Marking the narrowest crucial support and resistance levels in order to apply the Fibonacci retracement

2. After we receive signals from the Stochastic Oscillator

■ (↑) Long Trades

Each time EURUSD reaches an important Fibonacci level as support and the Stochastic is found at 20 and rising we enter a Short (Bearish) trade.

■ (↓) Short Trades

Each time EURUSD reaches an important Fibonacci level as resistance and the Stochastic is found at 80 and falling we enter a Short (Bearish) trade.



TRADING ORDERS

■ Take Profit: 40-50 pips

■ Stop-Loss: 15-20 pips

■ Profit/Loss Ratio: 2.5


CHART: The Stochastic Strategy (EURUSD)

Day-Trading the Forex Majors using the Stochastic Oscillator and the Fibonacci Retracement


 

 

FIND ALSO: ► EA BUILDER TESTER | ► GET STARTED WITH FOREX | ► TRADE SYSTEMS

STRATEGIES: ► DAY-TRADE | ► SWING-TRADE | ► SCALPING STRATEGY | ► BINARY STRATEGIES

FOREX RATINGS: ► DIRECTORY | ► TRADE SPREADS | ► FOREX REBATES | ► FOREX SCALPING | ► SWAP RATES | ► FUNDS SAFETY

 

 

The Stochastic Day-Trading Strategy

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