Strategy for Stochastic and Fibo indicators

Trading strategy for indicators Stochastic and Fibo is a very simple breakout strategy based on Fibonacci levels and extensions, as well as on Stochastics, trading on the H1 interval, recommended currency pairs: GBPUSD or GBPJPY (or other highly volatile).

Marketplace: Forex;
Currency pairs: GBPUSD, GBPJPY;
Timeframe: H1;
Indicators : Stochastic, Fibonacci levels;
Strategy: pips;
Protective ordersStopLoss, TrallingStop, TakeProfit, Breakeven.

Trading Indicators

And so for trading we need to set on the chart of the selected currency pair Stochastic Oscillator - Stochastic (14, 3, 3). We need only the line %K, for this purpose we color the line %D in the screen color.

To determine market entry levels, we place on the chart Fibonacci levels from the low to the high of the previous trading day.

Position Entry Rules

1) The price breaks through the level "100" or the level "0" of the Fibonnaci indicator (or in other words, breaks through the maximum or minimum of the previous trading day). Breakout - closing of the candle above the maximum or below the minimum of the trading day.

2) Having fixed the breakdown, we need to get confirmation of the signal from stochastics. The confirmation is a breakdown of the level "80" for a buy trade or a breakdown of the level "20" for a sell trade.

After breaking one of the levels, we rebuild the Fibonacci levels (if necessary) so that the Fibonacci extensions of 161.8% and 261.8% are on the side of the breakout of yesterday's level.

Profit taking by trading strategy

1) When the level of 161.8% is reached, close 50% trades, and put the rest of 50% trades to the breakeven level, and take profit for the rest of the position at the level of 261.8%;
2) Close all 100% trades to the 161.8% level;
3) Close the trade after breaking the level 80 in the opposite direction (for buying) or the level 20 in the opposite direction (for selling).

Stop loss should be set to the maximum current days (for sale) or a minimum of current of the day (for purchase).