Stochastic Overbought/Oversold Reversal (Python)

The strategy reacts to extreme levels of the Stochastic Oscillator. When the %K line dives into oversold territory the system expects a bounce, whereas overbought readings can foreshadow a drop. The method runs on short intraday candles so signals arrive quickly. After subscribing to the selected timeframe it monitors the %K and %D lines. A bullish setup forms when %K falls below 20 and then begins to recover. Conversely, a bearish setup appears if %K rallies above 80 and starts to turn down. A fixed percent stop controls risk for either side. Positions are exited when the %K line crosses back through the 50 level, signaling momentum has shifted toward the opposite direction. Because stops scale with the latest ATR, the trade size adapts to volatility.

• Entry Criteria:

• Long: %K < 20 with a bullish turn.

• Short: %K > 80 with a bearish turn. []Long/Short: Both. []Exit Criteria: %K crossing 50 or stop-loss. []Stops: Yes, at 2% distance. []Default Values:

• StochPeriod = 14

• KPeriod = 3

• DPeriod = 3

• CandleType = 5 minute [*]Filters:

• Category: Oscillator

• Direction: Both

• Indicators: Stochastic

• Stops: Yes

• Complexity: Basic

• Timeframe: Intraday

• Seasonality: No

• Neural networks: No

• Divergence: No

• Risk level: Medium