trading strategies for stochastic traders
. Each strategy is based on
a top-down trading strategy using the stochastic indicator. First one
identifies a stochastic trading set-up,
then one implements
a multiple times
to enter the trade.
advanced stochastic traders
ought to validate the trading set-up
on a higher time frame.
For new traders who are not yet competent in top-down trading system,
that may be a too much ask.
stochastic (8, 3, 3) is oversold on the 2H chart
price initially declined and formed a zigzag pattern, and was at a
key support level on the two-hour chart.
Stochastic Bullish Day Trading
trading signal occurs on the thirty-minute chart when the common
sense trend line
is broken or one isolates
a bullish chart pattern in the vicinity of the support
Stochastic Bullish Day Trading entry
entry takes place on the five-minute chart when the price retests the
declining channel after breaking above it or near the support level
that was highlighted on the two-hour chart.
Look for an inverted head and should chart
or another reliable bullish chart pattern on the five-minute chart.
stochastic (8, 3, 3) is overbought on the 2H chart.
price initially rose and formed a zigzag pattern
, and now was
a key resistance level on the two-hour chart.
Bearish Day Trading
signal occurs on the thirty-minute chart when the common sense
bullish trend line is broken or one notices
a bearish chart pattern on or near the key resistance
entry occurs on the five-minute chart as the price retests the rising
channel after breaking below
it or the resistance
level that was highlighted on the two-hour. One may notice either a
head and shoulders chart pattern
or another reliable bearish chart
on the five minute chart in the vicinity of the resistance
was highlighted on the two-hour chart.
always highlighting a support level.
overbought stochastic is always highlighting a resistance zone.
chart patterns or trading set-ups often
in the vicinity of a solid support level, but bearish
or near reliable resistance levels.
oversold and overbought stochastic
are just warnings, and technical
confirmations by focusing on the price-action.
bullish breakout will occur in the place of the bearish trading
if the price breaks above the resistance, and turns
bearish breakout (breakdown) will occur in the place of the bullish
if the price breaks below the support that turns it
a resistance level.
control the risk, one ought to apply a top-down day trading method.