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