Today we are going to analyze a trading strategy called MTF Stochastics Trading or simply MTF ST.
As part of this analysis, we learn:
- What tools does the strategy use, where to get them and how to install them in the trading terminal.
- What signals are given to us by tools.
- How to open and close trading positions based on signals
MTF Stochastics Trading Strategy Tools
This strategy is based on the data of several indicators, among which there are basic and auxiliary tools:
- #MTF Stochastic v2.2
- Stochastic Oscillator
- market price
- EJ_Canndle Time
- Market_Open_Lines c
As you can see, the main instruments are the regular and modified Stochastic indicators, installed in the same basement window. Other tools show:
- the time remaining until the candle closes;
- the size of the current spread;
- the number of points in “+/-” relative to the open position.
Instruments are installed in the same ways as the indicators included in the standard package of instruments of any trading terminal are installed on the chart. The difficulty for a trader may lie in the fact that most of the indicators are a proprietary product. It is difficult to find them individually.
The best option would be to download all instruments in a single template and install them on the chart with default settings. It is necessary to right-click on the background of the graph and select the “Template” item from the context menu, from where you can “Load the template” or pull it out from the list.
For example, a ready-made template with all the tools for the MTF ST vehicle can be downloaded under the video at the end of the article. After installation “from the template” you don’t have to configure anything, you can start trading right away. Be guided by the signals of the strategy indicators and follow its trading rules.
You should work on this strategy at TF M5.
There is no copyright notice regarding the choice of any particular currency instrument. Therefore, you can work with this strategy on any currency pair.
Market entry rules for buying
The best entry point is at the beginning of the trend. In this case, the following situation should be observed on the chart:
- Curves (green and red) of the #MTF Stochastic v2.2 indicator cross the “50” level from bottom to top;
- Curves (gray dotted line) of the Stochastic Oscillator indicator move in the same direction and also cross the 50 level.
Moreover, both pairs of these curves should not necessarily move synchronously or intersect. It is enough for us that the green and red curves have crossed the important level “50” from the bottom up and do not change their direction to consider a buy entry. Further, we can ignore the curves of the second indicator, drawn with a gray dotted line.
Buy positions are closed in one of three cases:
Both “Stochastics” reach the “80” level zone and are fixed there. We close the deal when the gray dotted curves leave this zone. At the same time, the green and red curves of another indicator begin to change their direction. You should not wait for the moment when they completely leave the specified zone.
Market entry rules with sale
As for the entrance for sale, here, dear friends, everything looks mirrored:
- The green and red curves of the #MTF Stochastic v2.2 indicator cross the “50” level in the downward direction;
- Gray curves (dotted line) of the Stochastic Oscillator indicator also cross the “50” level and move in the same direction as the curves of “#MTF Stochastic v2.2”.
We can also close a deal in one of the three ways that are described above for purchases, but in a mirror image. If, for example, when buying, we exited when the gray curves “Stochastic” were outside the zone of the “80” level, then when selling:
1) We observe the exit of these curves from the zone of level “20”;
2) Curves of both indicators “Stochastic” reverse or intersect, not reaching the level “20”;
3) The green and red curve of the #MTF Stochastic v2.2 indicator crosses the “50” level in the opposite direction – from the bottom up.
I recommend to close the deal and take profit at the moment when the price changes direction, leaving the zone of level “20”. This is where you can take the greatest profit on a sell trade.
These are all the rules that a trader needs to know in order to trade on the MTF Stochastics Trading system. It remains only for me to acquaint you with my results for a month. I traded on TF M5. The result is $ 1455. A bit confusing is the yield chart, somewhat reminiscent of the curve of the Stochastic indicator itself. However, the result of the trade turned out to be positive and we can say that you will not lose, but you should not rely on regular large profits.