New Method: Combination of Stochastic+RSI

Hello all,

First of all I'd like to thank you everyone in this forum who make this forum so informative, educative, and supportive. It has been the best forex forum for me.

I have a new method, but i don't know how to backtest using EA. Here is the method:

1. Stochastic: %K period=10
%D period=2
slowing=5
price field=close/close
MA method=simple

2. RSI: period=10
apply to=close

Buy when 2 conditions apply:
1. %K period line (fast line) crosses %D period line (slow line) GOING UP
2. RSI is >=50 GOING UP

Sell when 2 conditions apply:
1. Fast line crosses slow line GOING DOWN
2. RSI is <=50 GOING DOWN

Entry is done on the opening of the second candlestick (after the first candlestick that fullfils the 2 condtions)

Take profit at 50 pips and stop loss at 50 pips

I am using it on GBP/USD 4 hour graphic

This is not perfect yet. As I mentioned before, i don't know how to use and make EA, and i don't know how to post backtesting results using graphics, and etc. So, I would really appreciate it if anyone here could backtest the method or even make the EA or even improve it. Please all...advice me. Thanks very much.

Happy trading

I forgot to add that i think i have problems on:

1. Entry:sometimes it's just too late

2. stop loss: sometimes the position taken becomes a losing one but after a while the 50 pips point is reached but the stop loss of 50 pips has been touched first

Hello,

I'm no expert programmer (mostly self taught) but I'd be willing to give this a shot. I am currently looking for a short term 50 pips once/week strategy and this may fit the bill. I'll post the EA once I have it written and tested to function. Then perhaps we can work together and tweek it until its doing what you want it to do. I have your rules in the prev. post so I'll give this a try...hope we all make some money.

Jerry

I looked at your set up and at least over the past week or so it seems to be a winner on EUR/USD, GBP/USD, and AUD/USD. In regard to your question about hitting the 50 pip stop before going on to make the 50 pip limit...Have you considered running your stop along a MA say a 12 period EMA? Just spot checking here but it would seem that once an entry is achieved the price has closed above (long) or below (short) the 12EMA. if the price fades after that and touches the EMA it usually goes on to also reach the 50 pip stop. Why not limit the loss to 10-20 pips using the EMA to save some account drawdown. Just a suggestion but look it over and let me know what you think. AFTER I hear from you I'll start coding this project.

Hi fellows traders!

I use 5 ema shift 1 with stoc(8.2.3) and rsi(8) in 4h chart.

First price must cross above or below the 5 ema shift 1 then I look to the oscillators to confirm the cross.

Conditions for bias:
Long trade : - price cross above the 5 ema shift 1 then confirm by rsi above 50 and stoc cross up then try to buy in low time frame (5min or 1 min chart) after price retrace. I like to put stop loss 30 pips + spreads and take profit 30 pips (discretionary)

Short trade : - price cross below the 5 ema shift 1 then confirm by rsi below 50 and stoc cross down then try to sell in low time frame (5min or 1 min chart) after price retrace.

Test it

Hi!

5 ema shift 1, macd(21.55.8), stoc(8.2.3) setting in 5 min and 1 min chart.

After 4h chart confirmed a signal then I like to enter a trade in 5min or 1min chart when all confirm too.

Long trade : price is above 5 ema shift 1 and oscillators cross up but let macd cross up first then align stoc with the direction of macd cross. So we enter a trade after a retracement.

Short trade : price is below 5 ema shift 1 and oscillators cross down but let macd cross down first then align stoc with the direction of macd cross. So we enter a trade after a retracement.

Test it

Hi,

There are 5 times frames I use in day to day trading.

Do you open trades when all the TF's shows the signals.. Or do you open trade based on a particular TF.

Hi! Agg,

I open a trade when a signal confirm in 4h chart then I pinpoint a trade in 5 min or 1min chart align with the direction based on 4h chart.

Let say long trade :

1) Price makes a clean cross above the 5 ema shift 1 and the oscillators confirmed up (rsi above 50 and stoc cross up).

2) Then I pinpoint a trade in 5 min or 1 min charts when price is above the 5 ema shift 1 and the oscillators confirm up too ( let the macd cross up first then align stoc in the same direction of the macd cross)


Hoping is help

Hi,

As long as price trades above the 5 ema shift1 in 4h chart then the trend is still up. Then I like to look a better signal in 1h or 15 min charts.
The better signal (upward) in 1h or 15 min chart when price trades above 5 ema shift1 and the oscillators are up( macd cross first and align the stoc in the same direction of the macd cross).

Then I like to enter a trade in 5min or 1min chart when all confirm too.

Long trade : price is above 5 ema shift 1 and oscillators cross up but let macd cross up first then align stoc with the direction of macd cross. So we enter a trade after a retracement.

cenlonggo2,

Do you pinpoint your entries like sriloba on shorter timeframes? Maybe that will solve your problem of getting stopped out before price goes your way.

sriloba,

Why waiting for a signal of MACD before Stochastic? I would be tempted to use MACD as a confirmation after Sto because the latter is less lagging. And with the 30 pips stop loss, you are trading the 4 hr and not the 5 min, right?

Thanks

Hi! Chamane,

For me
- macd represents market over bought or over sold conditions
- stoch represents price over bought or over sold conditions

So let the macd( market) shows the way then enter a trade when
stoch (price) cross in the same direction of macd cross.

This is a conservative strategy you have to sacrify some pips but you will enter a trade with stress free and more confident because all are in harmony

sriloba,

How long have you been trading this? What's the rate of your success? Do you trade all currencies? Common questions, I guess...

Thanks

Hi! Chamane,

I trade this strategy since a year after 2 years of looking a stategy that fits my personality. In the past, I used fxbootcamp, Peter bains, Macd 4h, Raghee Horner and others strategies but they were good for the creators. But I was still not satisfied so last year I came up with this strategy and I had a lot of success. I am looking 30 pips a day with full lots (20$ per pip). Most of my trades gained more then 30 pips. BTW, I trade most of time eur/us.

Thanks

Thanks for your answers. I will have a look at your system. It sounds simple and logical. What session do you trade (Asian, London, NY)?

Hi! Chamane,

I start my trading day at midnight EST until 7:30 am EST. Then I go to sleep until 10:30 am EST because I want to see if there is a signal at London close ( around 11:00 am EST).




Thanks

Hi, Sriloba

Thanks for this interesting method, i was wondering if you can post some screenshots in future when u take a trade, i want to demo this method and that would be a great help and confirmation when i see that i took the same trade as you did

thanks...
Boutique

Hi! Boutique,


I will post the charts every time I trade with explanations for the set up.
Because I want all of you succeed in this business.





God bless you

Very good idea, Boutique! sriloba, if you start posting charts tonight, count me in, I'll be there. 0:00 ET. Thanks!

Hi, fellows traders

I want to share my full setting from 4h to 1min charts


4h chart : - 5 EMA shift 1
- 30 EMA shift 1 ( equal 5 EMA shift 1 in daily chart )
- STOCHASTIC(8,2,3) ; RSI(8)
- WEEKLY PIVOT POINT

1h chart : - 5 EMA shift 1
- 20 EMA shift 1 ( equal 5 EMA shift 1 in 4H chart )
- 120 EMA shift 1 ( equal 30 EMA shift 1 in 4H chart )
- MACD(21,55,8) ; STOCHASTIC(8,2,3)

15min chart : - 5 EMA shift 1
- 80 EMA shift 1 ( equal 5 EMA shift 1 in 4H chart )
- 480 EMA shift 1 ( equal 30 EMA shift 1 in 4H chart )
- MACD(21,55,8) ; STOCHASTIC(8,2,3)
- DAILY PIVOT POINT

5min chart : - 5 EMA shift 1
- 240 EMA shift 1 ( equal 5 EMA shift 1 in 4H chart )
- 1440 EMA shift 1 ( equal 30 EMA shift 1 in 4H chart )
- MACD(21,55,8) ; STOCHASTIC(8,2,3)

So every thing occurs in 4h chart ( my highest time frame) I can see with more details in low time frames because I periodize the 5/30 ema shift 1 to the 1h, 15min and 5 min charts.

Also when 5/30 ema shift 1 cross in 4h chart gives more strenght in trend
1) 5 cross above 30 the market is up
2) 5 cross below 30 the market is down

1min chart : - 5 EMA shift 1
- MACD(21,55,8) ; STOCHASTIC(8,2,3)

Thanks