The "Stochastic for GBP/JPY" strategy: minimal risk with a significant profit

The strategy "Stochastic for GBP/JPY" is used to trade on the currency pair GBP/JPY and uses Stochastic and RSI indicators, as well as analysis of candlestick patterns.

Input parameters

  • Currency pairs: GBP/JPY
  • Timeframe: H1
  • Trading hours: any
  • Type of strategy: trending, indicator

Used indicators

Fig.1. "Stochastic for GBP/JPY" strategy
Fig.1. "Stochastic for GBP/JPY" strategy

Opening a long position

Entry into a long position is made in the presence of a strong downtrend, the line Stochastic indicator is below level 20, the RSI indicator line is below level 30. The prerequisite for entry is a bullish candle, which must close in the middle or above the previous candle.

Opening a short position

Entry into a short position is made in the presence of a strong uptrend, the line indicator Stochastic is above level 80, the line indicator RSI - above level 70. A necessary condition for entry is the presence of a bearish candle, which should close in the middle or below the previous candle.

Fig.2. Entry points of the "Stochastic for GBP/JPY" strategy
Fig.2. Entry points of the "Stochastic for GBP/JPY" strategy

Position management

Exit a long position is carried out at the transition from the oversold zone in the overbought zone, when a bearish candle appears. Closing at half or below the previous candlestick.

Exit a short position is mirrored.

It is recommended to put a stop loss of 100 points. Despite the large size of the stop, according to the authors of the strategy, the filtering of market noise, combined with the high reliability of oscillator signals, given the change in trends, minimizes risk and allows you to get a tangible profit in each trade.

According to experts, the strategy "Stochastic for GBP/JPY" can be used only in conditions of a pronounced trend movement. It can be used on other trend pairs with the introduction of additional filters to the strategy.

You may also be interested in

Leave a Reply

Back to top button