dual stochastic trading strategy

and, d is 100 x Highest Price of (N minus a lesser number) time periods. Before moving forward to discuss the dual stochastic forex trading strategy, Ill first lay a foundation by defining and describing the underlying stochastic oscillator concepts. The trader behind this great invention is called Freddyforex. The trader should wait until the price of the currency pair he or she is trading brakes through the upper bands. However, for the dual stochastic strategy described below, I also use an additional exponential moving average (EMA) as a separate confirmation indicator. Then enter your settings in the dialog box.

The basic single stochastic compares a forex pairs closing price to its overall price range during a given period of time by using two lines or bands. Note also that the 20 EMA was touched. Conditions for placing a Buy order. A stochastic oscillators sensitivity to marketplace volatility can be reduced by making adjustments to the time periods, as well as by using different moving averages for the D value. Dual Band with Stochastic trading strategy trading rules. The most commonly-used values of N used for single, basic stochastics are time-periods of 5, 9, or 14 units. You can experiment with a different number of periods, and this may affect the results of the strategy. The Dual Band with Stochastic was designed for trading the following currency pairs: EUR/USD, USD/CHF, AUD/JPY, USD/JPY, NZD/USD, EUR/JPY, USD/CAD, CAD/JPY, GBP/USD, GBP/JPY, USD/CHF and AUD/USD.

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This dual stochastic strategy focuses on trading when the two indicators are showing extreme opposite values. The word stochastic itself is derived from a Greek word meaning aim and in general finance the word usually refers to the seemingly random pattern of values around a given target value. Fast D equals a three-period simple moving average of Fast. This easy-to-calculate oscillator was one of the very first indicators used by technicians searching for insight into price moves. The background of stochastic oscillators, the first basic stochastic oscillator was developed in the late 1950s by financial analyst.

If all this is the case, then the trader should place a sell order. Like some other traders, Ive found that using a single stochastic oscillator usually doesnt produce consistent winners. The separate EMA indicator provides confirmation of the signal shown by the stochastic oscillators. The Dual Band with Stochastic trading strategy was developed in the year 2014.