Using Stochastics in Bear Markets

Sept. 9, 2022

This week we’re talking about what has worked this year.

So many things have struggled. It would be nice to know what hasn’t struggled.

In our last Newsletter, a long-term system on a 4-hour chart held up very nicely. How about another long-term system?

This one uses the Stochastics indicator and was talked about in the 4/2/21 Newsletter. Here are the details:

Daily Stochastic Breakout (using Master Trend)

• Target: 1000 pips
• Stop: 400 pips
• Time Exits: 20 for Long, 10 for Short
• Enter Long on a Stochastics break above Overbought (2 length, 70 Overbought)
• Enter Short on a Stochastics break below Oversold (2 length, 20 Oversold)

How has it done in the 2022 environment? Quite well:

See it here also. It hypothetically produced a ton of profit, over $11k.

So far we’ve seen two long-term strategies do well in high volatility.

We’ll take a look at a shorter-term system next.

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Disclaimer:
It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results are not necessarily indicative of future results. Examples presented on these sites are for educational purposes only. These set-ups are not solicitations of any order to buy or sell. The authors, the publisher, and all affiliates assume no responsibility for your trading results. There is a high degree of risk in trading.

HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.