High-Accuracy Stochastic Oscillator Strategy Using Key Support and Resistance

In this first powerful trading strategy, we use the Stochastic Oscillator with the settings (14, 3, 3).

The overbought zone is above level 80, while the oversold zone is below level 20.

The concept of this strategy is very simple. We are not going to enter the market randomly. Instead, we wait for price to reach an important KEY SUPPORT or KEY RESISTANCE area before looking for a potential trading opportunity.

Let’s look at the chart and walk through the strategy step by step.

At this moment, price is moving downward.

So what should we do?

Nothing.

We simply wait.

The first thing we need to do with this strategy is wait for price to move down toward a KEY SUPPORT area, or, if price is moving upward, wait for it to reach a KEY RESISTANCE area.

In our current example, this is the KEY SUPPORT area, while this is the KEY RESISTANCE area.

So remember this because it is extremely important:

Your job is simply to wait for price to reach either KEY SUPPORT or KEY RESISTANCE.

Do not rush into the market before price reaches one of these important areas.

And eventually, price continues moving downward and reaches the KEY SUPPORT area.

Now that price has reached KEY SUPPORT, we immediately need to check the STOCHASTIC OSCILLATOR.

Has the Stochastic reached the oversold zone below level 20?

If the Stochastic Oscillator has not reached the oversold zone below level 20, then we simply ignore this price movement.

There is no valid setup yet.

We move on and look for another market that meets all of the requirements.

But in our example, something very interesting happens.

Price successfully reaches the KEY SUPPORT area…

and at the same time…

the STOCHASTIC OSCILLATOR also reaches the oversold zone below level 20.

Now the primary requirements of our trading strategy have been fulfilled.

But we are still not entering immediately.

The next thing we need to do is wait for the STOCHASTIC OSCILLATOR to reverse upward and break above the level 20 line.

This confirmation is what we are waiting for.

And if we look carefully at the chart, we can also see that a BEARISH GAP occurred and was subsequently closed by two strong bullish candles.

Those two strong bullish candles show that BULLISH MOMENTUM is currently very strong.

So now we have the setup we are looking for.

We immediately enter a BUY at the opening of the next candle.

For the STOP LOSS, we place it below the nearest SWING LOW.

And then…

BOOM!

Price immediately moves higher and gives us a significant profit.

Now, because price is moving upward, our next task is very simple.

We wait for price to reach the KEY RESISTANCE area.

Why?

Because once price reaches KEY RESISTANCE, we can start looking for a potential high-probability SELL signal.

And eventually…

price successfully reaches the KEY RESISTANCE area.

Now we repeat the same process.

We analyze the position of the STOCHASTIC OSCILLATOR.

And this time, the Stochastic Oscillator also reaches the overbought zone above level 80.

Now the next step is to wait for the STOCHASTIC OSCILLATOR to reverse downward and break below the level 80 line.

And when the Stochastic reverses and breaks below level 80…

something very important appears on the chart.

We get a high-probability candlestick pattern:

A BEARISH PIN BAR.

This gives us the confirmation we are looking for.

So we immediately enter a SELL after the STRONG BEARISH candle closes.

For the STOP LOSS, we place it above the nearest SWING HIGH, specifically above the BEARISH PIN BAR.

And then…

BOOM!

Price starts moving downward smoothly.

Once again, the strategy has produced a clear trading opportunity.

Now, if we look toward the left side of the chart, we can see that another relatively strong KEY SUPPORT area has formed.

So our task remains exactly the same.

We wait for price to move downward and reach this KEY SUPPORT area.

But unfortunately…

this time the bearish movement is extremely strong.

Price doesn’t simply reach KEY SUPPORT.

It BREAKS BELOW KEY SUPPORT.

And this is extremely important.

Even if the STOCHASTIC OSCILLATOR has already reached the oversold zone below level 20…

we simply IGNORE THIS MOVEMENT.

Why?

Because the price has broken below the KEY SUPPORT area, so we do not have the setup we are waiting for.

There is no reason to force an entry.

Instead, we wait for a new setup to form…

or we simply look for another market that meets all of the required conditions.

That is the entire concept.

Very simple. Very clear.

The strategy is built around waiting for price to reach KEY SUPPORT or KEY RESISTANCE, then using the STOCHASTIC OSCILLATOR to identify the appropriate condition and waiting for the required reversal confirmation before entering.

And most importantly…

these are high-accuracy entry signals with the potential for a high probability of winning when the required conditions are properly aligned.

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High-Accuracy STOCHASTIC HIDDEN DIVERGENCE

Hidden divergence occurs when the price forms a lower high, but simultaneously, an indicator forms a higher high.

We can see an example of hidden divergence here:

During this pullback, the Stochastic Oscillator rises to this level, but on the subsequent pullback, the Stochastic Oscillator climbs even higher. It has already fully reset into the overbought territory while the price forms a lower high.

We can see an example of hidden bullish divergence here:

The price has recently reached a clear higher high, while the Stochastic Oscillator simultaneously recorded a higher low within oversold territory.

This Hidden Divergence analysis suggests that the market may be sufficiently satisfied to initiate a correction, presenting an opportunity to enter at a discounted price before resuming its bullish trend.

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Double CCI Forex & Stock “SCALPING and SWING” Trading Strategy

Double CCI Forex & Stock “SCALPING and SWING” Trading Strategy. Double CCI Forex & Stock “SCALPING and SWING” Trading Strategy – The “DOUBLE CCI” is a trend following trading system. Double CCI with Exponential Moving Average is very good at catching the trends of the market very early and it lets you ride the swing of the market untill the end.

So, Double CCI with Exponential Moving Average can become a money printing machine for you if you follow the rules of the system in a smart way.

Double CCI with 34 EMA is a type of trading system which any trend following traders would love to have. Its simplicity and its capability to create crystal clear signals are some of the reasons why this trading system is so special.

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