Stochastic on a trend pullback

Classic / trend · Timeframe: H1 · Sessions: London and NY

In a trend, buy when the stochastic leaves oversold (and sell when it leaves overbought).

How it works

The stochastic measures where price closes within its recent range. In an uptrend, oversold readings mark pullbacks and a %K cross above %D below 20 signals that the pullback is ending.

Step-by-step rules

1. EMA50 > EMA200 (buys) or the reverse.
2. %K crosses above %D below 20 (or below %D above 80 for sells).
3. Entry at the close; stop at the 5-candle extreme - 0.2 ATR.
4. 2R target.

How Marketalyx tests it

Detector (H1): stochastic (14,3) cross at an extreme in the direction of the trend; stop at the 5-candle extreme; 2R target.

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Related strategies

Pullback to the EMA50 in a trend · Donchian 20 breakout (Turtle) · MACD cross with EMA200 filter · Supertrend (10, 3) · Ichimoku: Tenkan/Kijun cross with the cloud

Educational content. No strategy guarantees profits and past performance does not guarantee future results.