MACD and Stochastic oscillator trading

MACD and Stochastic oscillator trading is a momentum strategy that works well with trends on medium and long timeframes (starting with H1, H2, H4, H6 and daily).

Currency pairs: majors and indices.

Indicator setting:

MACD oscillator (2,26, 9);

Stochastic oscillator( 8, 3,3).

A trend is determined using Stochastic Oscillator and MACD oscillator. The main feature of this strategy is to find where a trend starts and ends and to perform appropriate trades. A point where a trend starts is found using MACD oscillator lines crossing and pointing upward/downward and %D line of Stochastic Oscillator turning. If MACD lines and %D line of Stochastic are in the same direction, there is a good probability of trend in course. A point where a trend ends is where MACD oscillator lines cross.

Buy : an uptrend is determined by a turning point of %D line of Stochastic oscillator. The %D line througth the oversold zone and the line %D should be pointing up. After the turning point of stochastic oscillator, the Signal line of macd oscillator going upward. This crossing should be in a negative zone and not more than 3 periods from the point where %D line of Stochastic oscillator changes its direction. When the current candle/bar is closed and all 3 lines (%D of Stochastic, MACD line and MACD’s Signal line) are pointing up, a buy order is opened with a stop loss (default: H1 20-30 pips), and a trailing stop (default: H1 18 -25 pips) is set when the position is profitable. The long entry is closed when MACD line crosses a signal line downward in a positive zone.

Sell:

an downtrend is determined by a turning point of %D line of Stochastic oscillator. The %D line througth the Overbought and the line %D should be pointing down. After check the turning point of stochastic oscillator, the Signal line of macd oscillator going downward. This crossing should be in a positive zone and not more than 3 periods from the point where %D line of Stochastic oscillator changes its direction. When the current candle/bar is closed and all 3 lines (%D of Stochastic, MACD line and MACD’s Signal line) are pointing down, a sell order is opened with a stop loss (default: H1 20-30 pips), and a trailing stop (default: H1 18 -25 pips) is set when the position is profitable. The long entry is closed when MACD line crosses a signal line upward in a negative zone.

MACD and Stochastic oscillator trading is profitable in range market and medium trend.

How apply this strategy? Go at daily time frame of more currency pairs and check if there are currency in range market, after go at H1 or H4 (reccomended ) and apply this strategy at the currency in range.