Stock Predictor trading strategy

Fast Stochastic Cross and Stop Loss

This is the Fast Stochastic Crossing strategy with an added stop-loss sell signal.

Strategy group

Stochastic oscillator strategies

Based on

Fast Stochastic %K and %D

Typical parameters

p = stop-loss %

The stop loss is triggered on the day the closing price falls p percent below the last buying price, which limits the loss when a buy signal turns out to be wrong.

Trading signals

• Buy when %K crosses above %D.
• Sell when %K crosses below %D.
• Stop loss: sell when the closing price falls p percent below the last buying price.

Strategy rules

IF STO%K >= STO%D
   THEN GO LONG
ELSE IF STO%K <= STO%D OR C(t) < BUY_PR * (1 - p/100)
   THEN GO SHORT

Where STO%K and STO%D are the fast stochastic lines; C(t) is the closing price. BUY_PR is the last buying price and p is the stop-loss percentage.

See also: how the Fast Stochastic Oscillator indicator is calculated.