Stochastic Strategy | Forex indicator download- MT4/MT5 resources
I'm testing a strategy and I thought it would be of interest to people if I posted the results of each trade in this thread as they go from analysis to exit (win or loss).
Documenting such a strategy would force me to develop a formal trading plan due to public exposure. (Where I tend to fall down).
The test will run for 100 transactions and I estimate it will last approximately six months. The goal at the end of the test is to have a positive balance of 1,000 points.
The D1, H4, H1 and M15 timeframes will all be traded, and all currencies will be traded as long as they meet the selection criteria.
Chart Settings <br> Candlestick chart is used with 50 SMA and stochastic indicator set to 5, 3, 3. Overbought and oversold zones will be set at 20 and 80.
Place the 50 SMA moving average on the chart to calculate the slope value. This value is then used as part of the currency selection criteria. This value is the spread between the 0th and 19th bar of the SMA (out of 20 bars in total). The purpose of the slope will be clearly stated in each trade setup description.
The range of values between the high and low bars is also used in the selection criteria. The value is the spread between the highest and lowest points from bar 0 to bar 14 (15 bars in total). The purpose of this range will also be clearly stated in each trade setup description.
Strategy <br> The strategy is fairly simple but will vary slightly between certain time frames.
When settings change during testing, they are logged here. In particular I imagine the range and slope values will change.
General currency selection (all timeframes and all currencies)
For any currency to be considered for inclusion on the watch list to potentially trade on any time frame, its price must meet the following 2 criteria:
1. The spread must be less than 4 points
2. Stochastic must be in the overbought/oversold zone.
D1 time frame selection (all currencies)
For any currency to be considered and put on the watch list to potentially trade on the D1 timeframe, its price must meet the following criteria as well as those in the general selection section:
1. The slope of the expected trade direction must be at least 5 points.
2. The range must be at least 80 points.
3. Note the first support or resistance area.
4. Note the second support or resistance area.
H4 time frame selection (all currencies)
1. The slope of the expected trade direction must be at least 25 points.
2. The range must be at least 50 points.
3. Pay attention to the first support or resistance area.
4. Pay attention to the second support or resistance area.
H1 time frame selection (all currencies)
1. The slope of the expected trade direction must be at least 20 points.
2. The range must be at least 40 points.
3. Note the first support or resistance area.
M15 timeframe currency selection (all currencies)
1. The slope of the expected trade direction must be at least 5 points.
2. The range must be at least 20 points.
3. Note the first support or resistance area.
Trade Access <br> Once a possible entry point is established, we watch the currency for a possible entry point.
General conditions of entry (applicable to all industries)
All transaction entries must meet one of the following conditions
1. Price action entry points. For example. needle bar or engulfing bar or
2. Price moves from overbought/oversold areas (with attitude).
D1 and H4 Admissions
D1 and H4 transaction entries should meet the conditions in the General Entry Conditions section, including the following.
1. Lot size should be divided into two separate transactions or
2. Initial stop loss is set 2 pips above the current swing high/low. (Some judgment may be required here)
H1 and M15 entries
H1 and M15 trade entries should meet the conditions in the General Entries section, including the following.
1. Lot sizes for H1 and M15 are reserved for single trades or
2. The price target is set to 2 points plus the spread over the current swing high/low. (Some judgment may be required here)
Trade Management D1 and H4
1. Close the first lot at the first support/resistance zone and move the second lot to break even.
2. Close the second hand at the second support/resistance zone.
Trade Management H1 and M15
1. Close the entire trade at the first support/resistance area
Things to note:
The initial range and slope values are random and not based on any passed data. Hopefully these values will have more meaning as transactions are processed.
Not all transactions are required. Avoid trading at support or resistance levels. If you are not happy with the entry, stand aside as there will be more opportunities.
If my description is unclear, just ask.
We very much welcome your comments.
John
Documenting such a strategy would force me to develop a formal trading plan due to public exposure. (Where I tend to fall down).
The test will run for 100 transactions and I estimate it will last approximately six months. The goal at the end of the test is to have a positive balance of 1,000 points.
The D1, H4, H1 and M15 timeframes will all be traded, and all currencies will be traded as long as they meet the selection criteria.
Chart Settings <br> Candlestick chart is used with 50 SMA and stochastic indicator set to 5, 3, 3. Overbought and oversold zones will be set at 20 and 80.
Place the 50 SMA moving average on the chart to calculate the slope value. This value is then used as part of the currency selection criteria. This value is the spread between the 0th and 19th bar of the SMA (out of 20 bars in total). The purpose of the slope will be clearly stated in each trade setup description.
The range of values between the high and low bars is also used in the selection criteria. The value is the spread between the highest and lowest points from bar 0 to bar 14 (15 bars in total). The purpose of this range will also be clearly stated in each trade setup description.
Strategy <br> The strategy is fairly simple but will vary slightly between certain time frames.
When settings change during testing, they are logged here. In particular I imagine the range and slope values will change.
General currency selection (all timeframes and all currencies)
For any currency to be considered for inclusion on the watch list to potentially trade on any time frame, its price must meet the following 2 criteria:
1. The spread must be less than 4 points
2. Stochastic must be in the overbought/oversold zone.
D1 time frame selection (all currencies)
For any currency to be considered and put on the watch list to potentially trade on the D1 timeframe, its price must meet the following criteria as well as those in the general selection section:
1. The slope of the expected trade direction must be at least 5 points.
2. The range must be at least 80 points.
3. Note the first support or resistance area.
4. Note the second support or resistance area.
H4 time frame selection (all currencies)
1. The slope of the expected trade direction must be at least 25 points.
2. The range must be at least 50 points.
3. Pay attention to the first support or resistance area.
4. Pay attention to the second support or resistance area.
H1 time frame selection (all currencies)
1. The slope of the expected trade direction must be at least 20 points.
2. The range must be at least 40 points.
3. Note the first support or resistance area.
M15 timeframe currency selection (all currencies)
1. The slope of the expected trade direction must be at least 5 points.
2. The range must be at least 20 points.
3. Note the first support or resistance area.
Trade Access <br> Once a possible entry point is established, we watch the currency for a possible entry point.
General conditions of entry (applicable to all industries)
All transaction entries must meet one of the following conditions
1. Price action entry points. For example. needle bar or engulfing bar or
2. Price moves from overbought/oversold areas (with attitude).
D1 and H4 Admissions
D1 and H4 transaction entries should meet the conditions in the General Entry Conditions section, including the following.
1. Lot size should be divided into two separate transactions or
2. Initial stop loss is set 2 pips above the current swing high/low. (Some judgment may be required here)
H1 and M15 entries
H1 and M15 trade entries should meet the conditions in the General Entries section, including the following.
1. Lot sizes for H1 and M15 are reserved for single trades or
2. The price target is set to 2 points plus the spread over the current swing high/low. (Some judgment may be required here)
Trade Management D1 and H4
1. Close the first lot at the first support/resistance zone and move the second lot to break even.
2. Close the second hand at the second support/resistance zone.
Trade Management H1 and M15
1. Close the entire trade at the first support/resistance area
Things to note:
The initial range and slope values are random and not based on any passed data. Hopefully these values will have more meaning as transactions are processed.
Not all transactions are required. Avoid trading at support or resistance levels. If you are not happy with the entry, stand aside as there will be more opportunities.
If my description is unclear, just ask.
We very much welcome your comments.
John
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