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BEST 1-2-3 STOCH-MACD & RSI Trading Strategy


BEST 1-2-3 STOCH-MACD & RSI Trading Strategy – Everything you need to know about STOCHASTIC,  MACD, and RSI technical analysis. This is a very simple and profitable technical analysis that is proven to have a high win rate. so let’s get on the strategy.

Trading NOTES

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In this technical analysis, we are using a combination of three technical indicators. the Stochastic Oscillator, RSI, and MACD.

Trust us, you don’t wanna be ignoring these rules. Follow these rules, and you will dramatically increase the chances of a divergence setup leading to a profitable trade.

The Stochastic Oscillator

The Stochastic technical indicator tells us when the market is overbought or oversold.

The Stochastic is scaled from 0 to 100. When the Stochastic lines are above 80, or (the red dotted line in this chart), then it means the market is overbought. When the Stochastic lines are below 20 , or (the blue dotted line), then it means that the market is possibly oversold.

One of the most common mistakes that traders make when using this indicator is that they’re trading the stochastic by itself so they take a buy position every time the indicator hits oversold and they take a sell position every time the indicator hits overbought.

If you’re still using the indicator this way you will get a very low win rate.

The RSI 50 Level

The Importance of RSI 50 Level to Confirm the Trade Setups. RSI 50 level can be used as a strong tool to confirm the different kinds of trade setups from any trading system.

Whether you use the candlestick patterns, support and resistance breakout, or any other trading system, you can consult the RSI 50 level to confirm your trade setups.

The MACD Crossover

MACD is a great technical indicator to confirm the setups, locate and follow the trends, no matter what trading system you trade. The MACD is one of the most popular technical indicators that does a very good job of detecting momentum.

And a common way of using the MACD is by taking a buy position if the MACD line crosses above the signal line, and taking a cell position if the MACD line crosses below the signal line.

However, this strategy only works if the market is trending. if the market is moving sideways the MACD often gives false signals.

So that is why for this combination strategy we are not going to buy or sell just because the MACD crosses over, instead we are using it to give extra confirmation and making sure that the momentum is on our side.


How to install the “TraderVersity STOCH-MACD System
  • Download “TraderVersity-STOCHMACDsystem” (Zip/RAR File).
  • Copy mq4 and ex4 files to your Metatrader Directory …/experts/indicators/
  • Copy the “TraderVersity-STOCHMACDsystem.tpl” file (template) to your Metatrader Directory …/templates /
  • Start or restart your Metatrader Client.
  • Select Chart and Timeframe where you want to test your forex system.
  • Right-click on your trading chart and hover on “Template”.
  • Move right to select “TraderVersity-STOCHMACDsystem” trading system and strategy.
  • You will see the “TraderVersity STOCH-MACD System” system is available on your Chart.
BUY Setup

When seeking to open BUY positions, observe indicator readings as follows:

  • To identify a BUY signal, the first step is you want to look at the stochastic oscillator and wait for both the K and D lines to hit oversold.
  • Then you want to use the RSI to confirm the uptrend by making sure that it’s above the middle line.
  • The next step is you want to use the MACD to confirm the upwards momentum by waiting for the MACD line to cross above the signal line.
  • Once this happens, however, you still need to make sure that both of the stochastic lines still hasn’t hit overbought yet.
  • If all the rules were met you take a buy position.

Your exit strategy:

  • If you took buy positions you want to place your stop loss below the nearest swing low and set your profit target at 1, or 2 times your stop loss.
SELL Setup

When seeking to open SELL positions, observe indicator readings as follows:

  • Let’s start with their entry signal. to identify a SELL signal, the first step is you want to look at the stochastic oscillator and wait for both the K and D lines to hit overbought,
  • Then you want to use the RSI to confirm the downtrend by making sure that it’s below the middle line.
  • The next step is you want to use the MACD to confirm the downwards momentum by waiting for the MACD line to cross below the signal line.
  • Once this happens, however, you still need to make sure that both of the stochastic lines still hasn’t hit oversold yet.
  • If all the rules were met you take a SELL position.

Your exit strategy:

  •  If you took SELL positions you want to place your stop loss above the nearest swing high and set your profit target at 1, or 2 times your stop loss.
Trading NOTES

This is a very simple and profitable technical analysis that is proven to have a high win rate.

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