Stochastic Crossing Strategy For MT4

Stochastic Crossing Strategy For MT4

The Stochastic Crossing Strategy For MT4 is a trading system that looks rather simple. Indeed, it is simple for the very fact that it uses only one indicator for determining the trading rules. Traders who have been using some kind of a trading system earlier at some point would know that trading with just one indicator can prove to be quite disastrous. The reason behind this is because there is no way to validate the buy or the sell signals by using another indicator.

This is the biggest drawback of the stochastics crossing forex strategy. There is just one custom indicator which, as you can see plots the up and down arrows on the price chart. If you were to blindly follow these trading signals, chances are that you would face a few winning trades and quiet of you losing trades.

At times we feel that the stochastics crossing forex strategy is rather incomplete. Now this can be both an advantage and disadvantage for traders. For one, those who are adventurous enough could look into customizing this trading system. But this would make the stochastics crossing forex strategy or very custom trading indicator for the trader in question. On the other hand, the disadvantage is that you cannot really rely on the trading signals from just one indicator.


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As the title suggests, the stochastics crossing forex strategy makes use of a custom indicator where the buy and sell signals are generated based on the overbought and oversold levels from the stochastics oscillator. While you can trade based off these up and down arrows which basically represents the overbought and oversold levels in the market, you might not always see a winning trade.

False signals are more common especially when the market is moving in a sideways range. The buy and sell signals could typically show price action moving just a few pips in either direction. Therefore, it is a dangerous combination where you can easily see prices hitting your stop loss quite frequently. The only way to overcome this is to figure out the trend in question and then trade accordingly. But as you can see, the stochastics crossing forex strategy does not make use of any other indicators such as a trend filter.

The indicator that you see on the sub window is called the extreme explosion indicator. This is a custom indicator but in reality, it is merely a volume indicator with the moving average assigned to it. Volume doesn't really play a big role when it comes to the forex markets. Therefore, it makes this extreme explosion custom indicator rather redundant as it does not add much value to the trading strategy itself.

Those who wish to continue using the custom stochastics crossing strategy can either make use of a trend filter such as the moving averages or you could also look at some price action techniques. For example you could block the trend lines and then base your trading decisions when the trendline breaks and is confirmed by the stochastics crossing indicator.

Let's now take a look at how you can trade long and short positions using the Stochastic crossing forex strategy for MT4.



The Stochastic Crossing Strategy For MT4 – Long positions




For a long position using the stochastics crossing forex strategy, wait for price to make a swing low. Following this, wait for the up arrow to be plotted. This usually happens when the market is moving from an oversold level.

Now identify the recent swing high that formed and set your pending long order at this position. Set your stop loss to the low that formed and then calculate the risk to reward ratio and set your take profit level accordingly. You should keep a close eye on the take profit level and move it when the trade moves in your favor. This will ensure that you continuously remove any risk on the table.

During strong trending markets, there is a very good chance that price can continue moving in the same direction. Therefore, we recommend splitting your position into 2 units so that you can leave the remainder of the trade open in order to capitalize when the trend is strong.



The Stochastic Crossing Strategy For MT4 – Short positions




For a short position using the stochastics crossing forex strategy, wait for price to make a swing high. Following this, wait for the down arrow to be plotted. This usually happens when the market is moving from an overbought level.

Now identify the recent swing low that formed and set your pending long order at this position. Set your stop loss to the high that formed and then calculate the risk to reward ratio and set your take profit level accordingly. You should keep a close eye on the take profit level and move it when the trade moves in your favor. This will ensure that you continuously remove any risk on the table.

During strong trending markets, there is a very good chance that price can continue moving in the same direction. Therefore, we recommend splitting your position into 2 units so that you can leave the remainder of the trade open in order to capitalize when the trend is strong.



Is the Stochastic Crossing Strategy For MT4 profitable?


The stochastics crossing forex strategy is certainly a trading system that requires a lot of improvement. Obviously, you cannot expect to make consistent profits in the markets by using a forex trading system that utilizes the trading signals based on just one technical indicator.

For this reason, we do not recommend the stochastics crossing forex strategy for beginners. Professional traders can make use of the custom indicator that comes with this trading strategy and build their own customized or personalized trading system. But besides this, there is no real use for using the stochastics crossing forex strategy the way it is designed.

Therefore, our final conclusion is that traders can skip the stochastics crossing forex strategy because of the fact that it is a rather incomplete trading strategy.

Download the complete system description and the files here:

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