Here’s a good video explaining how your stop loss can be used against you by the institutional traders. Very eye-opening video. YouTube
Here’s NZDJPY showing where many retail traders would be selling right now because it has already reached resistance. Their stop loss would most probably be right above the upper wick of the second red candlestick to the left. As you would notice in the stochastics below, it has not yet reached my upper level setting of 98. The way I would trade this using stochastics is I would wait for the stochs to reach 98 before selling. The price would most probably reach the second resistance level I have drawn, if it pierces the first resistance level and take out all the stop loss of retail traders who shorted it too early (based on stochastics). After which, it would most probably reverse once hitting the 98 stochastics level.
Consequently, the Rate of Change of NZDJPY would also most probably reach +1.0% or higher when the stochs hit 98. Confirming that NZDJPY has pretty much already moved as high as it could for the day and would be reversing.
Yes, thanks, its as I thought. No doubt its a clever piece of work but nobody trades this way so it has to be asked how useful this bot is.
It was deliberate on my part to come up with a trading strategy that nobody else is doing. Since everybody else is losing money trading forex, maybe I’d be different. 
. I’m hoping that this bot does prove to be profitable for the long run so I can help more traders become profitable and freeing them from having to stare at their computer screens for many hours daily. I have made this available for copy trading on CTrader Copy even now when it is still on Demo. Will continue to make it available to everybody when I am already trading with it on a live account.
Your motives are good and so is your reasoning that doing what the majority of traders do will get the same result.
Keep at it. But it must be realistic.
Some traders using the usual support/resistance based strategy and shorted NZDJPY earlier, right below the first resistance line, and used a stop loss, most probably already got their stop loss taken out (as I have predicted). Although stochs is already at 98, I’ll wait for the ROC (currently at +0.84%) to reach around the +1.0% mark then I would open a sell position to short it.
Close enough to the second resistance level, stochastics has reached 100, ROC is at +1.12%. It’s time to short NZDJPY. This is how I use stochastics to signal entry and when to double position as well.
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Hello, I also use the stochastic oscillator in overbought areas to enter the trades on the whole give good results … I hope you tell us what settings do you use on stochastic and the time frame you are working on?
I am using 14.3.3 settings
I use 5.1.1 with 98/2 upper/lower level and trade the daily time frame
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Your charts do not match up with what you’re saying. The chart is gbpnzd. You’ve done that on other posts too. Please recheck as its incorrect.
It is correct. Look at what currency pair window is highlighted. It’s NZDJPY
Got it! Thanks. Its moved against you since you said you sold. What’s the plan?
Thank you, Do these settings always give you valid flags? Do you enter until the candle closes?
It moved enough to take out those who shorted it and placed a stop loss at slightly above the resistance line. After that, it has reversed back down to the resistance line. Plan is to wait for the next move of NZDJPY. Since my entry is so close (position is losing by -15 pips now) to the resistance, there is significant chance that the market will just correct itself and reverse back to my position. I can now either wait for it to do so, or if the market moved against me significantly again, I normally would wait for the stochastics and ROC to be where it should be again, before I would double position.
Here is how it looks like now when zoomed in at the 1hour chart. It shows where my entry price is and where the stochastics resistance line (now support) is as well. See how the market moved against me, just enough to take out my stop loss, if I had placed it, before reversing back to the resistance line. If I had waited for ROC to be around the +1.30% mark instead of the +1.12% when I entered, I’d probably be above the resistance line and still a little profitable.
This strategy of course, is not full proof. What it does give you is a second chance, if you are wrong the first time. Since this entry strategy allows you to enter very close to a support/resistance zone, there is a significant chance that the market would correct itself back to your position. Your choice to either close at a smaller loss (compared to setting a stop loss), close at a small profit (to be sure, in case it does not reverse your way completely but just enough to close your position at a small profit), or use double position after the market moves against you significantly again. In which case, I would use the same entry strategy I have outlined, but use double position instead.
Since I use ROC together with stochastics, I can enter as soon as stochastics hit the upper level I have set but only If ROC has hit the ±1.30% mark at the same time. The stochastics would already be at 100/0 by then. In which case, I would open a position.
You can lower your ROC threshold to maybe ±1.10% or wait for it to hit ±1.50% which is usually the ROC that trendy (those that tend to have long trend runs) pairs. ROC depends on which pair you are trading. I’ve noticed that pairs with AUD, NZD and JPY are the ones that go all the way to ±1.50% and beyond, before reversing.
Here is how the chart looks now at the 5 minute chart. It closed right below the support line at the end of the hour and seems to be continuing to reverse back to my position now.
Now if I am feeling anxious, I can close my position at breakeven.
Since I believe in my strategy from the very beginning, I would risk it and let it (hopefully) reverse completely in my favor, for a nice profit. My stochastics and ROC based entry strategy allows me to not abandon my strategy at the first sign of trouble, because even if I was wrong at the start, the market would most likely correct itself back to my position anyway. As long as my entry is not too far from the reversal (pivot) point where the trend began, I can take the risk. Trend followers on the other hand, need a stop loss because their entry price may already be too far away from the beginning of the trend, that they cannot risk being wrong the first time. They are the ones who get stopped out.
Have you back tested this system? What are the statistics?
Yes. My bot has tested it. Out of the over 11, 000 trades it has executed as of today, probably half of it has been double positioned multiple times. My bot is still profitable.
