Stochastic and alligator multi-entry scalping FOREX strategy

by REDtradera: I prefer strategies with very high win rate. For me personally, it's always better to see account growing steadily and slowly, instead of waiting for one big hit. This scalping strategy works very well for me and I have been using it for about two years (1 year on demo).

 

After I identify trend using multiple moving averages (coupled into alligator) I enter the trade based on stochastic oscillator. But just there the fun begins ! I use tight stop loss so losses are pretty common. After a loss I use partial martingale. Therefore, I will be placing another pending order at the same price, with same targets but with double the low size. Depending on the account size I may do that 3 -4 times at max. Then I just accept the loss. Considering the profit target and lot size, loss will be 4 times bigger than average winning trade. But winners are about 9 times more likely to occur. Exactly the way I like it !

 

For the best results, trade with professional ECN/STP broker with MT4. If you can't trade with profit. Automatically copy the traders that are already profitable.

 

Used forex indicators

  • Alligator 130,80,50. This is pretty common setup for alligator indicator that provides good sensitivity for trend and yet is not confused at every correction.

  • Stochastic oscillator (default setting). We will be entering the position based on blue and red line crossing in overbought/oversold zones.

  • Apply both indicators in 5 min chart of any currency pair.

Sell:

All three of alligator lines are aligned according to downtrend, meaning that they are lined from slowest (130) to fastest at the bottom (50). Lines must be untangled and nicely separated. If in doubt avoid the entry.

 

Signal:

Red stochastic line crossing blue line upwards in overbought zone (above 70). This action is coupled with bearish candle. We enter the trade short on its close. Stop loss is placed above the high of signal formation.

Take profit: Distance that equals size of signal formation.

If trade fails, place pending sell order at the same price with same targets with double the lot size. If the second trade fails also, double the trade size one more time and place the third order with same targets.

 

Buy:

All three of alligator lines are aligned according to uptrend, meaning that they are lined from slowest (130) to the fastest at the top (50). Lines must be untangled and nicely separated. If in doubt avoid the entry.

Signal:

Red stochastic line crossing blue line downwards in oversold zone (below 30). This action is coupled with bullish candle. We enter the trade long on its close. Stop loss is placed below the low of signal formation.

Take profit: Distance that equals size of signal formation.

If trade fails, place pending buy order at the same price with same targets with double the lot size. If the second trade fails also, double the trade size one more time and place the third order with same targets.

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