Its a system I have recently developed, inspired by Jake Bernstein's great book, The Complete Day Trader. I changed a bit the stop loss and exit rules to make the profits run a bit more.
I call it Stochastic OBOS, for Over-Bought-Over-Sold..
This is basically a trend following system, works well in trend phases. I sometimes filter the trades with Range Indicator to avoid ranging periods.
Works best on GBPUSD\EURUSD\GBPJPY
I use this system on 15M\1H\4H. Of course, If there are conflicting signals the higher timeframe wins...
*Stochastic Oscillator (K%=10, D%=3, Slowing=3), remove the signal line (slowing) as you won't be using it here.
Enter Long after Stochastic main line crosses 60 up.
Enter Short after Stochastic main line crosses 40 down.
Stop order is placed 1 pip above the high of the candle (for long), and 1 pip below the low of the candle (for short).
Exit trade when Awesome Oscillator makes one bar in opposite direction of your trade. Explanation:
If you are long and Awesome Oscillator creates a red bar - exit trade when the bar is closed.
If you are short and Awesome Oscillator creates a green bar - exit when bar is closed.
Just look at the pictures.. it doesn't really matter to be 100% precise in these exits, anyway the trends you'll catch are big enough so late exits won't hurt the profits too much.
As usual I recommend not risking more than 2% of equity on a single trade.
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