Stock Predictor trading strategy

Fast Stochastic Cross/Rising

A plain stochastic crossing gives many signals in the middle of the range. This strategy filters them by the absolute level of the oscillator.

Strategy group

Stochastic oscillator strategies

Based on

Fast Stochastic %K and %D

Typical parameters

a = 20, b = 80

It buys on an upward crossing of %D by %K only when the crossing happens below level a, and sells on a downward crossing only above level b. Typical levels are a = 20 and b = 80.

Trading signals

• Buy when %K crosses above %D while both lines are below a.
• Sell when %K crosses below %D while both lines are above b.

Strategy rules

IF STO%K < a AND STO%D < a AND STO%K >= STO%D
   THEN GO LONG
ELSE IF STO%K > b AND STO%D > b AND STO%K <= STO%D
   THEN GO SHORT

Where STO%K and STO%D are the fast stochastic lines and a < b.

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