Stochastic Scalping with three moving averages Strategy For MT4

Stochastic Scalping with three moving averages Strategy For MT4

The Stochastic Scalping with three moving averages Strategy For MT4 is a simple but effective trading strategy. It works on both medium term and long term time frames. The indicators in use in the Stochastics scalping with three moving averages forex trading system are commonly found. Therefore, you don’t really need to download any special indicators.

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The exception to this is of course a modified version of the stochastics oscillator which plots the red and green lines when price is moving in and out of the overbought and oversold levels of the stochastics oscillator.

The charts are very clean and traders who have been trading for a while will find that the Stochastics scalping with three moving averages forex trading system is very easy to use. It also makes for a good trading system that is intelligent. You should of course have an understanding of how the markets work and how the indicators work in this trading strategy.

As the name suggests, there are three moving averages used in the Stochastics scalping with three moving averages forex trading system. The three moving averages are based on 21 period smoothed moving average, 89 period exponential moving average and the 144 period exponential moving average.

Following this, we also have the SSH signal which plots the red and green dots on the price chart. This indicator plots these dots based on when price makes a local high or a low. Finally, we have the stochastics oscillator itself. It is called the stochastics color oscillator due to the nature in which hit plots the red and green lines around the 80 and 20 levels of the indicators.

Thus, combining all these indicators, we get the Stochastics scalping with three moving averages forex trading system. Let’s now take a look at how we can trade the markets using the Stochastics scalping with three moving averages forex trading system.

Stochastics scalping with 3 moving averages trading system – Long positions




In the Stochastics scalping with three moving averages forex trading system, we look for the long position by first watching the price chart itself. We need to see price being in a downtrend previously. We then wait for price to make a bottom. This is done by looking at the stochastics color oscillator which will turn green.

Following this, wait for price to breakout from above the three moving averages. After this, we also need to see the three moving averages turning bullish. At this point you can then go long in the markets. There are different ways to trade the Stochastics scalping with three moving averages forex trading system. In the above long example we have taken a long position when price broke out above all the three moving averages.

As you can see, you would have lost out a few pips in the process. Another method is of course to wait for the pull back as shown in the long trade example. Set your stop loss to the nearest low prior to entering the long position.

For take profit, we can set it to the short term moving average. But the risk of doing so is that you might get stopped out prematurely. This will mean that you might lose out to the remaining part of the trend, especially when it is strong. Another alternative is to simply set a fixed risk to reward ratio set up. This way you will be able to make consistent profits over time.

Stochastics scalping with 3 moving averages trading system – Short positions




In the Stochastics scalping with three moving averages forex trading system, we look for the short position by first watching the price chart itself. We need to see price being in an uptrend previously. We then wait for price to make a top and then flatten. This is done by looking at the stochastics color oscillator which will turn red.

Following this, wait for price to breakout from below the three moving averages. After this, we also need to see the three moving averages turning bearish. At this point you can then go short in the markets. In this short set up example of the Stochastics scalping with three moving averages forex trading system, you can see that we waited for a retracement back to the moving average. This is a great way to trade as it tells you that the trend is strong. In fact you are entering at a critical turning point in the trend or the pullback.

The stops here, when entering at such a juncture is small but the rewards are quite big. In such a short set up for the Stochastics scalping with three moving averages forex trading system, we recommend that you remain in the trend for as long as possible.

For take profit, we can wait for the stochastics color oscillator to signal a change in the trend. Alternately, simply watch price as it makes the lower lows and lower highs. This will indicate that prices might change trend in the near term. Therefore, if you have logged good enough profits, you might be able to get out of the market a few pips richer.

Is the Stochastics scalping with 3 moving averages trading system good for you?


The Stochastics scalping with three moving averages forex trading system as demonstrated in this article falls between a medium term and a long term trading strategy. There is a bit of logic that needs when trading with this strategy.

If you are just a beginner in forex trading, then the Stochastics scalping with three moving averages forex trading system might not be suitable for you. You need to have a good understanding of the moving averages, the trends, the price’s lows and highs as well as some knowledge about what the stochastics oscillator is and what kind of information it displays.

The results or the success of using the Stochastics scalping with three moving averages forex trading system greatly depends on the trade themselves.

Download the complete system description and the files here:

FREE Stochastic Scalping with three moving averages Strategy

Download the FREE Stochastic Scalping with three moving averages Strategy for MT4.

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