Strategy 2 Stochastika - earnings on two oscillators
The main idea of the strategy is to use 2 oscillators with different settings. The slower Stochastic Oscillator filters signals fast and increases the share of lucrative deals. Strategy 2 Stochastika can be applied not only in the forex market, but also on binary options, there are no restrictions on currency pairs and timeframes.
Indicators used in the free forex strategies that work
The stochastic indicator estimates the Close price position in the High/Low price range for the period specified in the settings. The use of two oscillators with different settings allows to assess the market situation in a short and medium-term period.
In TS, work with the schedule is not carried out at all, only with indicators. Two Stochastics with parameters will need to be added to the schedule:
9, 3, 3 - considered fast in this Forex strategy.
21, 9, 9 - slow oscillator indicator used as filter.
The resale/overbought levels are 80 and 20 respectively. For low-molecular assets, they can be moved to 70 and 30.
The main disadvantage of this type of oscillators is that during the trend line they hang for a long time in the area of overbought/resale. The strategy of the two Stochastiks is also not devoid of this disadvantage.
The settings are given for M5-M15 timeframes, for senior timeframes you will have to experiment and select parameters yourself. As the period of slow Stochastic increases, the delay in receiving the signal increases, but also the chance of receiving a loss decreases. It will be necessary to find a balance between the speed of arrival of the signal and reliability.
How is strategy two Stochastikas used?
There are several working methods for this vehicle:
Enter the market immediately after the lines of both oscillators are in the resale/overbought zone. If they are in the resale zone - only purchases are considered, in the overbought zone - sales. Trading so rather risky, there is a risk of getting on strong traffic when the lines of both oscillators stay in for a long time beyond 80/20 levels.
A plot has been identified where trading according to the method described above would cause several losses in a row.
Make a deal when crossing lines on the fast Stochastika, and on the slow line should be in the area of resale/overbought. Optional filter - You can wait for the fast oscillator lines to leave the zone. Strategy 2 Stochastika brings less loss-making signals, missing some of the profitable inputs, but the overall profit/loss ratio is growing.
When waiting for the fast oscillator lines to reach 80 or 20, there is a risk of missing most of the movement.
The most conservative tactic of working is to wait for lines to cross on both oscillators. The fast indicator signal must be confirmed by crossing the slow Stochastic. At the same time, on a fast oscillator, the lines should not return back to the resale/overbought zone.
Recommendations on stop loss and teak-profite during operation on TS 2 Stochastika:
Stop Loss can be carried out for the last local extremum or for the High/Low turning candle if the signal appears on it.
Take Profit - either fixed 1.5-2.0 times more than SL, or close the transaction manually after the slow oscillator gave the opposite signal. You can just use a trailer stop.
The examples looked at the two Stochastika strategy for the euro/dollar, but it works on other currency pairs as well. It is desirable to limit the choice to volatile currency pairs, otherwise the profit will be too small.
Use of the trading system on binary options
When working with binary options, the main difficulty is to determine the duration of the export. If a trader can wait for an adverse period on Forex, then with options it is necessary to determine with the expiration date of the option in advance.
If the two Stochastika strategy for the euro/dollar or any other currency pair is to be used on binary options, one can advise:
Do not work with low-voltage assets.
The term of export is chosen at the level of 3-5 Japanese candles.
Operate on confirmed signals. That is, at least wait for the lines to cross on a slow oscillator.
Strategy Two Stochastics for binary options carries more risk than when trading on Forex. Its main disadvantage is that there is no guarantee that the price will go in the right direction immediately after receiving the signal.
Recommendations about work
Despite the fact that the free forex strategies that work is indicative, not all signals are worth taking into operation. The recommendations for the work are as follows:
Consider the behavior of the slow oscillator lines. If they long time are, for example, in an oversold zone, were several times crossed in it, then it is only better to open a long position after lines not only are crossed, but also leave it.
The position of the lines on the quick indicator is also taken into account. This is especially important if the work is carried out on binary options. Example - from slow Stochastic received a signal to open a long position, at the same time the line of fast Stochastic is already near the overbought zone. In such a situation, it is better to refrain from shopping.
Although the strategy does not require this, divergence is desirable.
Strategy two Stochastics for euro dollar shows one of the best results. You can also work with the rest of the currency pairs, but profits may be lower.
When working on a strategy, you can use support/resistance levels, Price Action pork patterns, and so on.
There is a technique for working with 2 oscillators, but using large periods. In this case, the parameters for the two Stochastics are as follows (given for a 15-minute graph):
480, 480, 1 - assesses a situation on a week taymfreym;
96, 96, 1 - is responsible for a condition of the market on the day schedule.
Strategy of work following:
On a 15-minute chart on slow Stochastika, you need a section when the% D line (dotted red) changes direction in the resale/overbought zone. At this time it is possible to open a deal, but with a large one as a M15 stop.
A quick Stochastic is needed to record profits. You must close the transaction after line% K enters the overbooking area (if a sale is opened) or resale (when purchases are made). This free forex strategies that work can be used for other currency pairs, but it is better not to apply it in the stock market.
This strategy 2 Stochastika for binary options is not appropriate. The price after receiving the signal does not go in the right direction immediately, so it is difficult to select the term of expropriation.
The strategy works well on currency pairs with high volatility, it is better to limit itself to the currency market and not to experiment with stocks, indices. This vehicle is applicable with a number of reservations and for binary options.
Among the advantages, we note the small time costs and the absence of restrictions on currency pairs and timeframes. But the main deficiency of oscillators the vehicle still did not get rid of - during a protracted trend false signals may appear.