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A Stochastic Trading Strategy for Sells

All the example charts are using ES, the symbol for the E-Minis.

1. Identify a market in any timeframe whose stochastic is >80.

Study Properties / Explanation
14 1 3 80 20
%K
Length
%K
Smoothing
%D Upper band Lower band
screen1
2. Wait for a 1-2-3 rally.

Study Properties / Explanation
3 higher highs or any combination of 2 higher highs and an inside bar ***
screen2
3. On bar 4 only, sell 1 tick below the bar 3 low. screen3
4. Your initial protective stop should be near the bar 3 high. screen4
5. As the position moves in your favor, trail your stops. screen5

<< Go Back (Strategy for Buys)


*** An inside bar is one that has a range within the range of the previous or next bar. (So, the example charts here show the inside bar as having the same high as the previous bar but a low that does not go as low as the previous bar's low.)


Disclaimer: The strategies are believed to be accurately presented. However, they are not guaranteed as to accuracy or completeness. Nor is it guaranteed that using them will result in profits or that they will not result in losses. Past performance is not a guarantee of future results. Only risk capital should be invested in the market. All investments and trades carry risk, and all trading decisions of an individual remain the responsibility of that individual.

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