Stochastic Hook Reversal Strategy

The Stochastic Hook Reversal watches the %K line for a hook out of overbought or oversold territory. After stretching to an extreme the oscillator often curls back, indicating momentum is waning.

Testing indicates an average annual return of about 166%. It performs best in the stocks market.

The system enters long when %K turns up from below twenty as price presses a new low. It sells short when the oscillator hooks down from above eighty during a final push higher.

Positions use a small percent stop and close when the stochastic hooks the other way or the stop is reached.

Details

• Entry Criteria: indicator signal
• Long/Short: Both
• Exit Criteria: stop-loss or opposite signal
• Stops: Yes, percent based
• Default Values:
  • CandleType = 15 minute
  • StopLoss = 2%
• Filters:
  • Category: Reversal
  • Direction: Both
  • Indicators: Stochastic
  • Stops: Yes
  • Complexity: Intermediate
  • Timeframe: Intraday
  • Seasonality: No
  • Neural networks: No
  • Divergence: No
  • Risk level: Medium