Adaptability, this is one key trait that traders should have. The market is volatile. Market conditions change in an instant. Traders who do not learn to adapt these changes could still have some fun when the market is working for them, but as the market changes, they find themselves at a loss as to why their strategies that used to work seem to stop working for them.
The Doda Stochastics Forex Trading Strategy is a strategy that allows traders to work with the market more often, in different types of market conditions.
There are two types of trading strategies that seem like exact opposites, mean reversal strategies and trend-based strategies. Both strategies work well for different types of market conditions. Mean Reversal strategies tend to work well for markets that are ranging, while Trend-based strategies work well in markets that have a high propensity to trend. The difficulty is when a strategy is used in the wrong market condition for its type.
Doda Stochastics Forex Strategy is a strategy that is a combination of both mean reversal and trend following type of strategy. This allows the strategy to work decently in a market condition that is suitable for mean reversal strategies, while still being able to catch a big chunk of the trend that trend following strategies aim to capture.
Doda Bollinger Bands
Bollinger Bands are probably one of the most popular indicators for technical traders. This is because Bollinger Bands provide a ton of information in one indicator. It provides trend indications based on the middle bands, which is a simple moving average. It also provides information regarding probable mean reversal areas using its outer bands, which are essentially markers for oversold and overbought territories.
However, in spite its effectiveness, many traders still find it difficult to use the standard Bollinger Bands indicator. This is because of the subjective nature of the entries generated by the Bollinger Bands. Traders would have to decide whether price is overextended enough to consider a mean reversal entry valid or whether a trend reversal entry has enough momentum to actually change the trend.
The Doda Bollinger Bands removes all these confusion by simply generating the entry signals as the market changes its trend. This allows traders to easily follow the market as it reverses and trends.
The Stochastic Oscillators is a classic indicator used by many mean reversal traders. It is an oscillating indicator which was first introduced by Dr. George Lane.
The Stochastic Oscillator is composed of two oscillating lines, one faster than the other. These lines crossover whenever the indicator detects a probable trend reversal, especially on the short-term.
Because the Stochastic Oscillator is a bounded oscillating indicator, traders could mark points in the range which they would consider as overbought and oversold. In most cases, traders would usually mark 80 and above as the overbought territory, and 20 and below as oversold.
The Doda Stochastic Bollinger Bands Forex Trading Strategy makes use of the mean reversal properties of the Stochastic Oscillator and the trend reversal entry signals generated by the Doda Bollinger Bands.
The Doda Bollinger Bands is quite easy to use. Entries are generated whenever the dotted lines shift either above or below price action, which also goes along with its changing of color.
The Stochastic Oscillator is used as a mean reversal trade filter. Buy trades are taken only when the Stochastic Oscillators are oversold and sell trades only when the lines are overbought. However, since the Stochastic Oscillator indicator is generally used for short-term trends, the parameters will be changed in order to capture longer-term trades.
- Stochastic Oscillator
- %K: 36
- Slowing: 24
- %D: 24
Timeframe: 1-hour, 4-hour and daily charts
Currency Pairs: major and minor pairs
Trading Session: Tokyo, London and New York sessions
Buy Trade Setup
- The Stochastic Oscillators should be below 20 indicating an oversold market condition
- The fast stochastic should cross above the slow stochastic indicating a bullish trend reversal
- The Doda Bollinger Bands indicator should change to blue and be printed below price action indicating a bullish trend reversal
- Enter a buy order at the confluence of these conditions
- Set the stop loss at the support level below the entry candle
- Close the trade as soon as the fast stochastic line crosses below the slow stochastic line
Sell Trade Setup
- The Stochastic Oscillators should be above 80 indicating an overbought market condition
- The fast stochastic should cross below the slow stochastic indicating a bearish trend reversal
- The Doda Bollinger Bands indicator should change to red and be printed above price action indicating a bearish trend reversal
- Enter a sell order at the confluence of these conditions
- Set the stop loss at the resistance level above the entry candle
- Close the trade as soon as the fast stochastic line crosses above the slow stochastic line
This trading strategy is one which has a decent win rate. This is due to the fact that it considers both mean reversal and trend reversal trade setups. It also allows traders to have decent returns compared to the risk placed on a single trade. Traders could typically find trades with reward-risk ratios of 1.5:1 to 5:1. This is possible because mean reversal trades usually imply that the opposite support or resistance level from the entry is quite far because the market is not yet overextended. Having a combination of a decent win rate and reward-risk ratio makes the Doda Stochastic Forex Trading Strategy an excellent strategy to use to make some profits out of the market.
Forex Trading Strategies Installation Instructions
Doda Bollinger Bands Stochastics Forex Trading Strategy is a combination of Metatrader 4 (MT4) indicator(s) and template.
The essence of this forex strategy is to transform the accumulated history data and trading signals.
Doda Bollinger Bands Stochastics Forex Trading Strategy provides an opportunity to detect various peculiarities and patterns in price dynamics which are invisible to the naked eye.
Based on this information, traders can assume further price movement and adjust this strategy accordingly.
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How to install Doda Bollinger Bands Stochastics Forex Trading Strategy?
- Download Doda Bollinger Bands Stochastics Forex Trading Strategy.zip
- *Copy mq4 and ex4 files to your Metatrader Directory / experts / indicators /
- Copy tpl file (Template) to your Metatrader Directory / templates /
- Start or restart your Metatrader Client
- Select Chart and Timeframe where you want to test your forex strategy
- Right click on your trading chart and hover on “Template”
- Move right to select Doda Bollinger Bands Stochastics Forex Trading Strategy
- You will see Doda Bollinger Bands Stochastics Forex Trading Strategy is available on your Chart
*Note: Not all forex strategies come with mq4/ex4 files. Some templates are already integrated with the MT4 Indicators from the MetaTrader Platform.
Click here below to download: