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SignalKING 588.78% $47,635.66 17378 47.6% 316 270 Invest
SignalGold 192.51% $9,625.48 667 59.37% 38 238 Invest
SignalMAX 523.59% $76,046.14 12184 69.74% 169 209 Invest

Binary Options and Forex Trading Strategy “Two Stochastic Oscillators”!

Binary Options and Forex Trading Strategy “Two Stochastic Oscillators”!
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Greetings, friends. It’s John Foster, and I want to continue the list of the most profitable and comprehensive trading systems at forex. At this time, I’d love to stop at the forex trading strategy “Two Stochastic Oscillators”, which, as you can guess from its name, is based on readings of two oscillators “Stochastic” with different settings. The principle of work is simple, and the system will be approachable even for a novice. For better and more accurate understanding, there is an illustrated step-by-step instruction below.

Contents

1.Designed for Forex or Binary Options?
2.How to Setup the Indicator?
3.How to Use the Forex Trading Strategy “Two Stochastic Oscillators”
4.How to Use the System at Binary Options Exchange
5.Some Nuances of the Forex Trading Strategy “Two Stochastic Oscillators”
6.Testing the Algorithm!
7.Finishing!

Actually, “Two Stochastic Oscillators” strategy is quite common, and it’s been used for several years by beginners basically. Don’t wait for enormous profits from the system, but it won’t let you suffer losses as well, because it’s too hard to make a mistake using the algorithm. The only problem is that novices often forget to set StopLosses, but I hope you are literal and understand that the absence of the StopLoss is another opportunity to waste the deposit. To be more accurate, it’s the one opportunity.

Designed for Forex or Binary Options?

The uniqueness of this strategy stands for the possibility of using it at forex and at binary options exchange with the same efficiency. Initially, “Two Stochastic Oscillator” strategy has been designed for currency exchange, but it has recently become among binary options traders. The principle of trading, i.e. some technical nuances for those two exchanges differ, so for your convenience, the instruction is divided into 2 parts: for forex traders and for options traders.

I must mention now that for trading with binary options using this system, you will need MetaTrader terminal. You can download it from any forex broker, having open the demo-account.

How to Setup the Indicator?

  1. Open your MT4 or MT5 trading terminal, click on Insert – Indicators – Oscillators – Stochastic. This operation should be done twice, because we need 2 tools with different settings.
  2. Set the settings of the indicators, as it’s shown at the image below. Stochastic with longer periods will be calmer and smoother and give less signals, and the second one will be dynamic. With that, the first one is needed for bolting out most false signals to enter the market given by the second one.
    forex-trading-strategy-1forex-trading-strategy-2
  3. Zoom in indicators in order to effortlessly notice the moment when their lines cross the top and the bottom dotted line. The chart should be minimized, as we don’t need it too frequently.

How to Use the Forex Trading Strategy “Two Stochastic Oscillators”

Step 1! Choose the currency quote and the timeframe. The latter can be whichever you want, but I recommend using charts from M15 to H4 – signals will be accurate enough, and the quantity of entrance points will let you gain considerable profits.

Step 2! Look for the entrance point. When both indicators are beyond the top line – get ready to enter to sell, as the market is overbought, and if beyond the bottom line – the market is oversold, and we have to open the order to buy. Pay attention, that indicators can intersect the dotted line not at the same time. In such case, you should wait until the late signal gives a signal. Don’t hurry – Stochastic oscillators often give false signals when used separately.

Step 3! Enter the market if the current bar is closed, and readings of both indicators still give the signal to enter. If the line of any of two Stochastics is within the canal made by dotted lines when the bar is closed, we don’t open any new positions.

Step 4! StopLoss and TakeProfit for the opened order should be set according to standard rules described in this article. Leave the market when both indicators give opposite signals at the same time. When so, open the order in the opposite direction at once.
forex-trading-strategy-3

How to Use the System at Binary Options Exchange?

As I’ve mentioned, the forex trading strategy “Two Stochastic Oscillators” may be used at binary options exchange only if MT4 or MT5 terminal is installed. You can download them, having opened a demo-account of any forex broker.

Step 1! Choose the time of an option and an asset to trade with. I recommend turbo-options of 60 seconds. What’s to assets, the strategy works with any currency quote or precious metal. What’s to shares and stock indices – you’d better keep away from trading with them using this strategy, as their behavior is quite different.

Step 2! Choose the timeframe in your trading terminal. It directly depends on the option-time you’ve chosen. The timeframe of the chart must be similar to the time of the option you work with. So, if you trade with tools of 60 second – the minute-chart should be taken, if you work with 2-hours-tools – take H1, with 5-hours-tools – H4, etc. The timeframe is not obliged to be the same exactly to the time of the option – they just need to be approximately equal.

Step 3! Look for a signal according to rules described in the previous instruction. When the indicator gives the signal to buy – buy the Call option (you bet that the price will be higher), when it gives the signal to sell – buy the Put option (you bet that the price will be lower). Buy options until the indicator give the opposite signal. So, you can gain from several orders via the one signal.

Some Nuances of the Forex Trading Strategy “Two Stochastic Oscillators”

  1. Trading is best during European and American session. You can see the schedule of market hours in the table below.
    gbpjpy-forex-market-hours2
  2. For forex traders: one the chart passes more than half of set TakeProfit toward you – move the StopLoss to the breakeven, i.e. to the level which you’ve opened the position at.
  3. For more accurate trading, you can use the RSI indicators as the addition for two Stochastic oscillators. The principle of RSI (Relative Strength Index) is the same as of the Stochastic oscillator. You should enter the market if 3 indicators intersect the top or the bottom dotted line. With that, the quantity of your trading orders will decrease a bit, though, most trading signals will stay.
  4. If you see the chart doesn’t have any certain direction and its movements are intermittent and chaotic – you’d better keep away from trading.

Testing the Algorithm!

I was working for a month with this trading system at the real account. I was trading at forex and binary options exchange at the same time. I haven’t noticed any difference in difficulty – the strategy is as simple in trading with currency, as it is in trading with options. I was using just two Stochastic oscillators for the first two weeks, and then added Relative Strength Index in my arsenal. In total, I gained 55% of the initial deposit within a month at forex, and 65% from trading with options.

forex-trading-strategy-4

For beginners, the strategy has its right to exist. It’s very comprehensive, doesn’t take long and gives the considerable result. Nevertheless, I don’t recommend working with it for more than 1-2 months, as then, with experience, you should leave for more advanced algorithms. I can recommend my own strategy “The Merger” or a scalping system “The Victory”.

Finishing

So, today we’ve studied the forex trading strategy “Two Stochastic Oscillators”, which can be used either at forex, or at binary options exchange. The principle of working is approachable and comprehensive even for a novice, and at the average, trading will take 2-3 hours a day at forex; and 1-2 hours at binary options exchange. To engage profitable trading with it, stick to the step-by-step instruction above. Average profitability of the system is 45-65%, accuracy is 7.5/10 correct signals.

Get lucky and gain much!

Best Regards, John Foster.

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