Stochastic-TrendReversal Strategy

Stochastic-TrendReversal is an elementary strategy concept using the Stochastic Oscillator.

Strategy Logic: The point of market reversal can be detected when the Stochastic indicator’s value exceeds one of 2 preset levels – BUY LEVEL (to the oversold area) or SELL LEVEL (to the overbought area). When the Stochastic Main Line crosses the Signal Line in the oversold/overbought area, we can distinguish 2 signals:

Buy Signal: Main Line crosses above the Signal Line and the Main Line is still under the BUY LEVEL.

Sell Signal: Main Line crosses under the Signal Line and the Main Line is still above the SELL LEVEL.

Stochastic-TrendReversal Strategy Inputs:

• UniqueStrategyNumber – Unique strategy identifier (Magic Number), each running strategy should have a different UniqueStrategyNumber.
• StochasticK – Settings for the Stochastic indicator %K line (Period settings)
• StochasticD – Settings for the Stochastic indicator %D line (Period of %D line as an average from %K line)
• StochasticSlowing – Settings for the Stochastic indicator Slowing (Slowing period of %K line)
• StochasticLevelBuy – Value of the BUY LEVEL (Usually a positive number around 20)
• StochasticLevelSell – Value of the SELL LEVEL (Usually a positive number around 80)
• OrderSizeLots – Fixed order Size in Lots
• StopLossPoints – Stop Loss distance from the entry price in Points (0 = No SL is set)
• TakeProfitPoints – Take Profit distance from the entry price in Points (0 = No TP is set)
• TrailingStopPoints – Trailing Stop distance in Points. When the Stop Loss distance from the current price is higher, the Stop Loss is adjusted closer to fit the preset level (0 = No TS is set)

Point – Minimal change in the asset quotation (usually the last digit)

Pip = 10 Points (regarding FX pairs)

Get the Stochastic-TrendReversal forex strategy:

Did you achieve the expected results in the backtest? Feel free to share your findings and opinions here in the discussion.