THE STOCHASTIC SCALPER TRADING STRATEGY
An easy-to-use scalping strategy that combines a SMA for trend identification and the Stochastic as a trigger. It can be used for trading any financial asset.
■ Style: Scalping Strategy
■ Name: The Stochastic Scalper Trading Strategy
■ Forex Majors | ■ Metals and Energy | ■ Stocks | ■ Indices
M5 timeframe (5-Minutes)
■ 10-15 daily trades
INDICATORS & SETUP
This strategy combines the Stochastic Indicator with a Simple Moving Average of 200 periods.
■ Stochastic Oscillator
-Settings at 10,3,3 instead of the standard setting (14,3,3)
■ Simple moving average (SMA) with settings:
This is how you may implement the The Stochastic Scalper Strategy.
The 200 SMA is used as a simple tool of determining the master trend. If the price chart is above the 200 SMA then there is an Uptrend while if the price chart is below the 200 SMA then there is a Downtrend.
■ (↑) Long Trades
Each time the price of an asset is above the SMA 200 and the Stochastic is recovering from 20 you get a Long Trading Signal (buy the market).
■ (↓) Short Trades
Each time the price of an asset is below the SMA 200 and the Stochastic is falling from 80 you get a Short Trading Signal (sell the market).
■ Take Profit: 20-30 pips | ■ Stop-Loss: 20-30 pips | ■ Profit/Loss Ratio: 1
In the chart we have implemented this strategy on EURCAD but it is better to prefer currencies that are traded in narrower spreads.
CHART: The Stochastic Scalper
■ The Stochastic Scalper Trading Strategy