Stochastic, MACD, Bollinger Bands Plus Day And Swing Traders

Day 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 frame trading

strategy to enter the trade.

Indeed, 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.

-Bullish Stochastic Day Trade Set-up

First condition:

The stochastic (8, 3, 3) is oversold on the 2H chart

Second condition:

The price initially declined and formed a zigzag pattern, and was at a key support level on the two-hour chart.

The 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 level.

The 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 pattern or another reliable bullish chart pattern on the five-minute chart.

First condition:

The stochastic (8, 3, 3) is overbought on the 2H chart.

The bearish 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 level.

The 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 pattern on the five minute chart in the vicinity of the resistance level that was highlighted on the two-hour chart.

Key Points

The oversold stochastic indicator is always highlighting a support level.

The overbought stochastic is always highlighting a resistance zone.

One must always highlight the key support or resistance level that the oversold or overbought stochastic indicator is pointing at.

Bullish chart patterns or trading set-ups often form in the vicinity of a solid support level, but bearish ones are on or near reliable resistance levels.

The oversold and overbought stochastic are just warnings, and technical traders must wait for confirmations by focusing on the price-action.

A bullish breakout will occur in the place of the bearish trading set-up if the price breaks above the resistance, and turns into a support level.