This strategy is trying to catch a trend and enters in a position on
pullbacks. The direction of the trend is determined on the basis of
the exponential moving average (EMA) and expected depth of the
pullback on the Stochastic indicator.
To determine the trend I choose the EMA indicator because it smoothes
the price movement, eliminates local fluctuations and places greatest
weight on the most recent data.
The stochastic indicator is a momentum oscillator which shows
overbought (values above 80) and oversold areas (values below 20).
When the trend is going up (EMA is going up) the strategy buys in a
oversold areas and when the trend is going down it sells in overbought
I was testing different settings and statistically I find that in the
one month period time to open more than 20 position (about 20-50) 15
minutes timeframe is the best choose. Further test shows that EMA 90,
Stochastic 5,3,3 gives nice results.
Of course it depends on the liquidity and market conditions.
Max SL is 155 pips and TP 80 pips but the strategy leads opened
position according to Stochastic and closing it earlier when
Stochastic indicator reaches overbought (for longs) or oversold (for
The strategy is using a constant trade volume 6M.