Stochastic Oscillator Forex strategy — it’s an exciting strategy with a relatively low fail rate. It’s based on a standard Stochastic Oscillator forex indicator, which signals a trend fatigue and change. That means you will almost always enter on pull-backs, guaranteeing relatively safe stop-loss levels.

Stochastic Oscillator Forex strategy Features

  • Simple to follow.
  • Used Only one standard indicator.
  • Safe stop-loss levels.
  • The take-profit(TP) level isn’t optimal.

Strategy Set-Up

  1. Any currency pair and mt4 timeframe should work. But longer timeframes are recommended.
  2. Add a Stochastic Oscillator forex indicator to the chart, set its %K period to 14, %D period to 7, and slowing to 7, and use the Simple MA method.

Entry Conditions

Enter the Long position when the cyan line crosses the red color one from below, and both are located in the bottom half of the forex indicator’s window.

Enter the Short position when the cyan line crosses the red color one from above, and both are located in the upper half of the forex indicator’s window.

Exit Conditions

Set stop-loss(SL) to the local maximum if going Long and the local minimum if going Short.

The most comfortable level for take-profit(TP) is between 1 * SL and 1.5 * SL.

Close position immediately if another entry signal is generated.

Example stochastic-oscillator-strategy

Five signals for this forex strategy can be seen in the example chart above. All stop-loss levels are marked with yellow horizontal lines on the chart. The first signal is for a Short sell position with a close stop-loss; take-profit is achievable here. The second one is a bullish entry signal, which turns out to be a wrong pull-back, but, fortunately enough, the stop-loss(SL) is quite tight here. The third signal is not a signal because it is a bearish figure cross that appears in the lower half of the chart window and thus is disregarded. The fourth entry signal is bullish with a stop-loss(SL) quite far away, but even the most aggressive take-profit level would work here. The final entry signal is for Short, with tight stop-loss(SL) and a lot of place for a rather profitable Take profit setting.

Ideally, bullish and bearish entry signals should follow one after another. Still, it is not always the case due to the occurrence of false signals (bearish in the lower and bullish in the upper half of the window).


Use this strategy at your own risk. cannot be responsible for any losses associated with using any forex strategy presented on the site. Using this strategy on the real account is not recommended without testing it on the demo first.


Do you have any suggestions regarding this strategy? You can always discuss Stochastic Oscillator forex Strategy with your fellow Forex traders on the Trading Systems and Strategies forum.