Stochastic Crossover Signals with Fixed Percentage Exits
Summary
This strategy uses a smoothed Stochastic oscillator to generate long and short signals. A long signal occurs when %K crosses above %D while %K is below the oversold threshold; a short signal occurs when %K crosses below %D while %K is above the overbought threshold. The stated defaults use a 14-period lookback, 3-period smoothing for both lines, and thresholds of 20 and 80.
Each entry sets a fixed percentage take-profit and stop-loss from the signal bar’s closing price. The supplied configuration uses a 2% target and a 1% stop. Although the description presents the method as dual-timeframe and mentions trend and candlestick confirmation, the provided source implements a single timeframe and does not show those additional filters.
A short BTC/USDT futures backtest configuration is included, but no returns or other test results are reported. The document warns that signals may be unreliable in ranging conditions, smoothing can introduce delay, and outcomes depend on parameter choices.
Key ideas
- A long signal uses a bullish %K/%D crossover while %K is below the oversold threshold.
- A short signal uses a bearish crossover while %K is above the overbought threshold.
- The stated defaults use a 14-period Stochastic with 3-period smoothing and 20/80 thresholds.
- Entries receive fixed percentage profit targets and stop losses based on the signal close.
- The description claims dual-timeframe confirmation, but the supplied source shows single-timeframe signals and no reported backtest results.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.