Forex trading strategy #3 (Stochastic High-Low)

Forex systems which adopt a Stochastic indicator for monitoring the price provide some very good tips about the situation on the market for traders that are willing to see it.

Currency pair: Any.
Time frame: Any.
Indicator: Full Stochastic (14, 3, 3)

Entry rules: When Stochastic has crossed below 20, reached 10, and then crossed back up through 20 – set BUY order.

Entry rules: Sell when Stochastic has crossed above 80, reached 90, and then crossed back down through 80.

Exit rules: close trade when Stochastic lines rich the opposite side (80 for Buy order, 20 for Sell order).

Advantages: gives quite accurate entry/exit signals in well trending market.

Disadvantages: needs periodical monitoring. Stochastic is suggested to be used along with other indicators to eliminated entering on false signals.

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