Two Stochastics

Indicators:

• Stochastic (5, 3, 3, 30, 70)

• Stochastic (21, 9, 9, 20, 80)

Key conditions:

The 1st signal is on fast Stochastic. A deal opens after a similar signal appears on a slow Stochastic.

BUY conditions (all conditions must be met):

• the intersection of %K

• %D of fast Stochastic in the zone below 30 from the bottom up

SELL conditions (all conditions must be met):

• the intersection of %K

• %D of fast Stochastic in the zone below 70 from top to bottom

Exit criteria: exit the trade by stop loss set by money management or when a reverse signal appears.

Exercise:

Open a chart of a currency pair using a timeframe of at least M30. Apply the Stochastic indicators with settings (5, 3, 3, 30, 70) for the fast Stochastic and (21, 9, 9, 20, 80) for the slow Stochastic. Ensure that the 1st signal is from the fast Stochastic and wait for a similar signal from the slow Stochastic to open a deal. look for a BUY signal when the %K and %D of the fast Stochastic intersect in the zone below 30 from the bottom up. Enter a long position on the next bar and set a stop loss according to your money management rules. Monitor the trade and exit when the stop loss is hit or a reverse signal appears. For a SELL signal, identify when the %K and %D of the fast Stochastic intersect in the zone below 70 from top to bottom. Enter a short position on the next bar and set a stop loss accordingly, exiting the trade when the stop loss is hit or a reverse signal appears.