Stochastic and Macd MTF with Support and Resistance Strategy For MT4

Stochastic and Macd MTF with Support and Resistance Strategy For MT4

The Stochastic and Macd MTF with Support and Resistance Strategy For MT4 is a complete trading package using some custom made indicators with static support and resistance levels. This strategy uses multiple confirmations with custom MACD and Stochastic to ensure trading accuracy. Therefore, traders from every level can profit from it by applying it in any currency pair and any timeframe.



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Are Stochastic and MACD Important Indicators?


Both stochastic and MACD are from an oscillator class that shows the overall market outlook from a different angle.

The stochastic moves from zero to 100 level where above 80 levels are overbought and below 20 levels is oversold.

On the other hand, the MACD moves like a histogram (vertical lines with red and green color) and moves above or below the zero line.

When the Histogram moves above the neutral level (zero level), the overall market outlook is bullish. Similarly, when the Histogram moves below the neutral level, the overall market context is bearish.

In this trading strategy, we will focus on both indicators, and when all indicators provide the same signals, we will enter the trade.



The Stochastic and Macd MTF with Support and Resistance Strategy For MT4


This trading strategy will use support and resistance levels to determine the price location and upcoming price movement.

Support and resistance levels are a price zone or level from where the price is expected to show some reversal.

Moreover, when the support and resistance levels break, prices show some massive movement towards the trend.

Before proceeding further, we will see trading indicators used in this strategy:


  • Kay Dual Timeframe MACD

  • Kay Dual Timeframe Stochastic

  • Kay Envelopes


Now we will see how the chart looks like after plotting these indicators:




Here we can see that the leading indicator is the Kay Envelopes that have Upper and Lower Bands. When the price reaches the Upper Bands, it faces minor resistance, and the price may come back lower from that level.

On the other hand, when the price will move to the lower band, it is expected to move higher to complete the correction.

Moreover, the MACD and Stochastic are custom-made indicators where the concert is the same as the default indicators in MT4.



Bullish Trading Strategy


If you want to take a buy trade using the Stochastic and Macd MTF with Support and Resistance Strategy For MT4, you should focus on the timeframe that suits your personality. This strategy is applicable on any timeframe from 5 minutes to daily, but the higher timeframe will provide more accurate results.

On the other hand, you can take buy trades on any currency pairs, whether it is major, minor, or exotic.



Bullish Trading Conditions


  • At first, open the chart at one timeframe higher to get the overall market outlook. For example, if you want to take trades on the 1-hour timeframe, take a market outlook from H4 or D1.

  • Identify the location of price with the weekly support and resistance levels and envelope levels.

  • Wait for the price to reject the lowe Bands of Envelope with a candle close.

  • Dual timeframe MACD should move above the neutral levels with a green Histogram.

  • Dual Timeframe Stochastic is also pointing buy signal by appearing above the 40 levels and heading upwards.




Entry


Take trades after ensuring all conditions, but wait for a closing candle to before taking the trade. Ensure that the candle is bullish, and the candle's body closes above the high of the previous candle.



Stop Loss


This strategy's stop loss should be below the Lower Bands of Kay Envelope indicators with some buffer.



Take Profit


This strategy's take profit idea is based on Fibonacci Extensions, where the first target is 61.8 Fibo Expansion and the second target is 100.00 Fibo Expansion.

However, follow these rules while setting the take profit level:


  1. Stochastic Reversal Signal.

  2. MACD Reversal Signal (MACD comes below the zero lines).

  3. Reversal signal in lower timeframe (Either in MACD or Stochastic).

  4. Price hit the outer Enevelop line.

  5. Breakeven hit.


Bearish Trading Strategy


If you want to take a Sell trade using the Stochastic and Macd MTF with Support and Resistance Strategy For MT4, you can trade on any timeframes that suit your personality. This strategy is applicable on any timeframe from 5 minutes to daily, but the higher timeframe will provide more accurate results.

Overall, you can take trades on any currency pairs and on any timeframes.



Bearish Trading Conditions


  • At first, open the chart at one timeframe higher to get the overall market outlook. For example, if you want to take trades in 1-hour timeframe, take a market outlook from H4 or D1.

  • Identify the location of price with the weekly support and resistance levels and envelope levels.

  • Wait for the price to reject the Upper Bands of Envelope with a bearish candle close.

  • Dual timeframe MACD should move below the neutral levels with Red Histogram.

  • Dual Timeframe Stochastic is also pointing Sell signal by appearing below the 60 levels and heading downwards.




Entry


Take trades after ensuring all conditions, wait for a closing candle before taking the trade. Ensure that the candle is Bearish and the candle's body closes below the low of the previous candle.



Stop Loss


This strategy's stop loss should be above the Upper Bands of Kay Envelope indicators with some buffer.



Take Profit


The take profit idea for this strategy is based on Fibonacci Extensions, as mentioned in the bullish trading strategy, and other conditions in profit-taking are based on the below-mentioned rules:


  1. Stochastic Reversal Signal.

  2. MACD Reversal Signal (MACD comes below the zero lines).

  3. Reversal signal in lower timeframe (Either in MACD or Stochastic).

  4. Price hit the outer Enevelop line.

  5. Breakeven hit.


Conclusion- Money Management Rules


Money management is an essential element for this trading strategy. If you follow all trading rules with appropriate money management rules, you can earn a guaranteed profit in every money.

Let's have a look at what you should follow as money management rules:


  • Do not take more than 2% risk per trade.

  • Always use specific SL and TP in every trade.

  • Make sure to take some profit when the market moves to the profitable zone.

  • Use trailing-stop loss to make the trade risk free.

Download the complete system description and the files here:

FREE Stochastic and Macd MTF with Support and Resistance Strategy

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