# Stochastic power ranger trading system

Stochastic power ranger trading system
is a momentum strategy.

Time Frame H1 or higher.

Currency pairs: majors at the H1 time
frame.

Stochastic power ranger trading system
is based on the concept that a range will form after the market
finishes trending. We use the stochastic to give us an indication of
a possible range formation. We also rely on the current market
momentum to tell us when to go long or short. If the market is moving
in an uptrend, we look to go long in the range. The entry is
determined by the

oversold region (below level 20) of the
stochastic.

If the market is moving in a downtrend,
we look to go short in the range. The entry is determined by the
overbought region (above level 80) of the stochastic. We use the most
recent high and low to determine the possible resistance and support
of the range.

This strategy has two profi t targets,
and we take the fi rst profi t target within the range. The second
profit target.

**Rules Stochastic power ranger**

**Long Trade Setup**

We use EUR/USD on the H1 time frame to
illustrate a long trade. Here are the steps to execute the Stochastic
power ranger strategy for long:

1. Draw an uptrend line based on a
series of higher highs and higher lows. (See Figure 1 .)

2. On the stochastic, look for %K and
%D to go below level 20 (oversold). (See Figure 2.)

3. Determine the support and resistance
of the range. Enter long once the stochastic crosses above level 20.

4. Set the first profi t target at the
75% mark of the range. Set the stop loss at a risk to reward ratio of
1:1, and set the second profit target at risk to reward ratio of 1:2.
After calculation, the stop loss must be below the support level. If
not, the trade is considered invalid. (See Figur3 .)1 |

2 |

3 |

4 Stochastic power ranger trading system |

from the long example in Figure 4 :

Entry price = 1.2919

Stop loss = 1.2877

Profit target 1 = 1.2961

Profit target 2 = 1.3003

The risk for this trade is 42 pips, and
the reward is 84 pips if both targets are hit. The risk to reward
ratio is 1:2, which yields a tidy 6% return if we take a 3% risk.

**Short Trade Setup**

We use AUD/USD on the H1 time frame to
illustrate a short trade. Here are

the steps to execute the power ranger
strategy for short:

1. Draw a downtrend line based on a
series of lower highs and lower lows. (See Figure 5 .)

2. On the stochastic, look for %K and
%D to go above level 80 (oversold). (See Figure 6 .)

3. Determine the support and resistance
of the range. Enter short once the stochastic goes below level 80.

4. Set the fi rst profit target at the
75% mark of the range. Set the stop loss at a risk to reward ratio of
1:1, and set the second profi t target at risk to reward ratio of
1:2. After calculation, the stop loss must be above the resistance
level. If not, the trade is considered invalid. (See Figure 7 .)

5 |

6 |

7 |

8 Stochastic power ranger trading system |

From the short example in Figure 8 :

Entry price = 1.0624

Stop loss = 1.0700

Profit target 1 = 1.0548

Profit target 2 = 1.0472

The risk for this trade is 76 pips, and
the reward is 152 pips if both targets are hit. The risk to reward
ratio is 1:2, which yields a tidy 6% return if we take a 3% risk.

Stochastic power ranger trading system
Reviewed by learn forex trading
on
November 20, 2014
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