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Stochastic

 

Stochastic oversold/overbought zone – a trigger that asks stochastic to reach overbought/oversold

Example for an income trader:

  • If trend is bullish when stochastic (5, 3) crosses below 20 look for a trade event
  • If trend is bearish when stochastic (5, 3) crosses above 20 look for a trade event

Example for a growth trader:

  • If trend is bullish when stochastic (15, 3) crosses below 20 look for a trade event
  • If trend is bearish when stochastic (15, 3) crosses above 20 look for a trade event

 

Stochastic crossover – a trigger that asks the stochastic %K line to cross above/below the %D line

Example for an income trader:

  • If trend is bullish when stochastic (10, 3, 3) %K line crosses above %D line look for a trade event
  • If trend is bearish when stochastic (10, 3, 3) %K line crosses below %D line look for a trade event

Example for a growth trader:

  • If trend is bullish when stochastic (25, 10, 10) %K line crosses above %D line look for a trade event
  • If trend is bearish when stochastic (25, 10, 10) %K line crosses below %D line look for a trade event

 

 

Move on to Step 4 - Module 2 > Trading System Builder Tool Kit: Trading Rules > Trigger: RSI

 

  

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