Color Stochastic is a forex trading system. It is a reliable and powerful forex trading system. This forex trading system can be used in various ways in various market conditions. Some might use it for scalping, some might use it for swing trading and some might use for very long term trade too. Color Stochastic forex trading system also can be used for figuring out the reversal points. Here in this article, we will be viewing this forex trading system from swing trading stand point. Swing trading can be best done by buying low and selling high. Market always move making waves, as a swing trader our goal should be to enter at the beginning of the bullish wave and exit when this bullish wave ends and to do this Color Stochastic system helps best.
Although you can trade in dynamic market situations with Color Stochastic forex trading system, trending market conditions are always an advantage and any trader would love the trending market instead of sideways market. But there are also lots of traders who love to trade range market and they make money on such types of markets too. It depends on the type of trader one is rather than the market conditions to make money consistently in forex market. Whether the market is trending or ranging people make money in both situations.
When the Color Stochastic forex trading system is correctly loaded on your trading platform your chart should look like this:
As you can see above, stochastic indicator lies at the bottom of the chart. It is filled with green and red color. Green color stochastic represents the start of bullish wave and red color stochastic represent the start of the bearish wave. You can also spot the divergence using this indicator but it is not used in our strategy. We will just focus on the color of the stochastic. To be in the right side of the market we will be buying only in an up trending market and selling only in a down trending market.
Buying Conditions Using Color Stochastic System.
- Scan for the currency pair which is up trending. This can be done by normally looking at the charts.
- Wait for the stochastic indicator to be green.
- Open your long position as soon as above conditions are met.
- Place your stop loss just below the recent swing low.
- Take your profits when the stochastic indicator turns red.
Selling Conditions Using Color Stochastic system.
Download Free Forex Color Stochastic indicator