Stochastic massive candle FOREX strategy

by Fxshowstopper: Fundamentally simple strategy with strong base in conservative approach. Identify trend. Find a good price. Enter with good timing. This forex strategy does all that very good. It is robust and can applied across all currency pairs and most of the timeframes. Let me show you through the rules !

 

Used forex indicators

  • EMA 50 and 100. Cross of moving averages is used to determine the trend direction. Again this is something that is commonly used. EMA 50 below 100 signalizes downtrend and vice verse. Make sure you always trade in the direction of this trend.

  • Stochastic: stochastic is a commonly used oscillator that works best for me. I don't use default indicators setting instead I Prefer 10,6,6 setup, that provides less but more accurate signal. Stochastic signal merely means that I should start to pay attention. I look for candle signal that confirms the trade and provides me with stop loss placement information.

  • Apply those tools in 30 min chart of EURUSD.

 

Forex strategy rules

 

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.

 

BUY:

EMA 50 (green) trending above EMA 100 (red). Uptrend is clearly visible.

We enter long only.

 

Signal:  Both stochastic lines falling below 30 line.

Timing (signal confirmation) : Strong bullish candle, closing above high of at least 3 previous candles. Ideally they all are bearish or indecisive bullish candles. Signal candle is wider than any of previous 3 candles. We enter the trade immediately on its close.

Stop loss is placed one pip below the low of signal formation.

Take profit: Depending on market conditions.

 First trade after EMA crossing: Place stop loss to break even after position reaches the profit that equals the signal size. Then wait for EMA 50 to cross EMA 100 downwards to confirm the trend reversal.

 

SELL:

EMA 50 (green) trending below EMA 100 (red). Downtrend is clearly visible.

We enter short trade only.

 

Signal: Both stochastic lines rising above 70 line.

Timing (signal confirmation) : Strong bearish candle, closing below the low of at least 3 previous candles. Ideally they all are bullish or indecisive bearish candles. Signal candle is wider than any of previous 3 candles. We enter the trade immediately on its close.

Stop loss is placed one pip above the high of signal formation.

Take profit: Depending on market conditions.

 First trade after EMA crossing: Place stop loss to break even after position reaches the profit that equals the signal size. Then wait for EMA 50 to cross EMA 100 upwards to confirm the trend reversal.

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“Trading FOREX since 2006. Full time trader and web developer since 2013. My two biggest hobbies are trading and web development. In TheForexKings I managed to connect both of them. Even after 12 years of trading I still have the same passion for the market as at the beginning. The aspect I enjoy the most : development and testing of new ideas.” 

 

Only in 2016 - 2017 we have created more than 400 forex strategies. During this period we have also developed and published +200 MT4 Expert advisors based on those strategies. We are dedicated to provide you with viable and complete trading systems that have thrived in extensive historical testing. We want to give you complete and transparent trading solutions, that once mastered ,will set you financially free. We want to give you a fighting and winning chance in the market. ” 

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