Does this strategy work? Honestly – not always. The use of oscillators in Forex is so hackneyed that their blind use inevitably leads to loss. In other words, if you simply mechanically perform the actions in the strategy described below, then the probability of earning is not the highest. However, not everything is so bad.

Recall: there are no perfect indicators. So no even the newest unique tool will be 100% effective. But this does not mean that it is impossible to work on the classic beaten tactics. You just need to follow a few recommendations:

• Evaluate the fundamental factors. The indicator is a mathematical formula that takes into account situations of past periods. You should always take into account the human factor.
• Learn to intuitively understand the market. Study the history, see the reaction of the indicators in different situations, see what preceded the appearance of the signal and whether it turned out to be effective.
• Experiment, do not give up and do not forget about the rules of risk management.

The strategy proposed below is based on a combination of candlestick analysis, stochastic and relative strength index. Its essence is classic: to catch moments of overbought and oversold markets, when there is a glut and when the deals are fixed, the trend reverses. And opening a position at the time of a rebound based on Forex oscillators.

## Forex Oscillators in Practice

We introduce some non-standard in the choice of a currency pair. In almost all strategies, we consider volatile EUR / USD, GBP / USD, etc. Volatility introduces an element of unpredictability, that is, risk. We offer a pair of GBP / JPY on the hourly timeframe. Firstly, these pairs are less subject to speculation (on volatile speculators will earn faster), therefore long-term strategies can be built on them. The H1 timeframe is also ideal in this case – the trend direction is calculated in advance. The use of forex oscillators in this embodiment carries minimal risks.

Indicator Settings:

• Stochastic Oscillator:% K = 5,% D = 3, Slow = 3, MA Method – Simple, Price – Low / High, Levels 20, 80.
• RSI: Period = 7, Levels: 30, 70.

Conditions for opening a long position:

• The candle in front of the signal Stochastic was above level 20, the RSI was above level 30.
• On the signal candle, both Forex oscillators went overbought (for stochastics below 20, for RSI – below 30).
• The first signal candle descending from the body in excess of 400 points.
• The next signal candle is a reversal (that is, ascending), its body is at least 50% of the body of the previous downward candle.
• It will be perfect (additional condition) if both indicators go above oversold levels.

After the second signal candle closes, open a deal. Exiting the market when one of the indicators has reached the opposite level (for stochastics – 80, for RSI – 70).

Conditions for opening a short position:

• The candle in front of the signal Stochastic was below level 80, the RSI was below level 70.
• On the signal candle, both Forex oscillators went into the oversold zone (for stochastics above 80, for RSI – above 70).
• The first signal candlestick with a body that exceeds 400 points.
• The next signal candle is reversal (that is, descending), its body is at least 50% of the body of the previous rising candle.
• It will be perfect (additional condition) if both indicators go below overbought levels.

After the second signal candle closes, open a deal. Exiting the market when one of the indicators has reached the opposite level (for stochastics – 20, for RSI – 30).

To reduce the risk, you can close 50% of the position when the oscillators go half way to the opposite level and insure it with a trailing. The use of Forex oscillators in this case is simple, so we wish good luck in testing and its implementation. It will be interesting to know your opinion on the strategy. Write in the comments what you think about its effectiveness!