The Stochastic Failure Swing monitors the oscillator for a lower high above 80 or a higher low below 20.
When the indicator fails to reach a new extreme and then reverses, it often signals a trend shift.
The strategy buys when a higher low forms below 20 and %K crosses back above %D, or sells when a lower high occurs above 80 and %K crosses under.
Trades employ a small percent stop and close when the stochastic crosses back through the prior swing level.
- 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