How to Use Stochastic Multi Timeframe

Previously you should have known about the use of the stochastic oscillator indicator which can provide an early signal of price direction. If this indicator is used in multi timeframes such as M15, H1, and H4 it will make us more careful in following the stochastic indicator signal. If we already know the basic knowledge about stochastic, then we can apply a trading strategy using multi timeframe stochastic. Considering this strategy uses stochastic on different timeframes, it takes patience and caution in taking open positions. If we are impatient and careful, this strategy will be useless.

The strategy of using only stochastic in 3 timeframes has an accuracy rate of up to 70%. It depends on the market situation and also the influence of the fundamentals. So that the implementation of good money management is also needed.


Trading strategy using Stochastic Multi Timeframe


The multi timeframe that I use is usually 3 timeframes. Maybe you can use 4 or 5 timeframes but later on more and more, it will make us confused to determine the open position.


Indicators used and how to set the indicators


The use of the stochastic indicator is actually very easy. You just need to move the indicator on the left of the metatrader chart to the chart that is currently open. After that we just leave the default setting. I prefer to use 5,3,3 settings. Because the smaller it will be faster to give a signal. Take a look at the stochastic indicator settings below.





For the indicators used, only the stochastic is used. Easier and simpler. Because there are fewer indicators, it will be easier for us to analyze. If most of the indicators will be useless. It can even make the computer so heavy.


How to analyze using stochastic in multi timeframe


For how to analyze it is very easy. You just see where the stochastic is crossing or where it crosses. If it crosses up, it means a buy signal, and if it crosses down it means a sell signal.


In addition, it can also analyze using overbought and oversold systems. If the stochastic crosses the 80 line, it means that it has started to overbought and is ready to open sell positions. And if it crosses the 20 line it can be called oversold or oversold. Do an open buy waiting for the stochastic cross conformation.


Meanwhile, if it is associated with a trading strategy using multi timeframe stochastic, we must observe the stochastic in 3 timeframes, namely the M15 timeframe as an entry, H1 as a trend signal confirmation, and H4 as the main signal or main signal. So every open position is based on the stochastic on the H4 and H1 timeframes.

And for execution, please use the stochastic signal on the M15 timeframe. You can open one chart with the same stochastic settings and change the timeframe every now and then we want or open 3 charts at once. It's up to you. Want to use 3 monitors is also not a problem.


The following is an example of a signal based on 3 timeframes of the stochastic oscillator on my chart along with its open position signal.



sample signal in 3 timeframes using stochastic



If you use a divergence strategy system, you can actually do it. Just combine in H1 and H4 Timeframes. Examples can be seen below.



sample signal in 3 timeframes using stochastic



Weaknesses of the stochastic oscillator strategy


The only drawback is in an unnatural market situation, which usually occurs during important news releases. For this reason, be careful if important news is released. Because the price movement at the time of the news is very large and very fast. If you open a position, you must pay attention to the movement of the chart so you don't miss it


Hope it is useful!

Related Posts

Posting Komentar

Subscribe Our Newsletter