Simple Stoch Strategy


The Stochastics oscillator (5.3.3) based trading strategy is one of the simplest oscillator based trading strategies. It is working with the overbought and oversold levels of the oscillator. The trading strategy works as a fast scalping trading system and can be used in almost any chart time frame. With enough practice you can make use of this trading strategy to make fast profits in the markets. The main factor to success is that the entries (buy or sell) should only be taken after the candle closes (please have in mind the spread when placing the take profit and stop loss levels).

Simple Stoch Strategy Rules

Long Set up

  • Stochastics gives a bullish crossover and rises from below 20
  • Buy on candle close
  • Take profit 50 – 80 pips
  • Stop loss below the most recent low

Short Set up:

  • Stochastics oscillator gives a bearish crossover and falls from above 80
  • Sell on candle close
  • Take profit 50 – 80 pips
  • Stop loss below the most recent high
  • The above chart shows multiple buy/sell signals using the Stochastics oscillator
  • Starting from the left, after the Stochs close below 80 with a bearish cross over, a sell order is placed on candle close with stops at the high of the previous candlestick
  • Take profit is placed 50 – 80 pips from entry, resulting in a profit
  • The next signal is a buy signal as stochastics oscillator gives a bullish cross over and rises above 20
  • A buy order is placed on candle close with stops at the low of the previous candlestick
  • Take profit is set to 50 – 80 pips from entry, resulting in a profit