Scalping Strategy of Stochastic with Candlestick Pattern

Scalping system is best for beginners in Forex. In this trading strategy, traders can find some signals from lower time frame with 10-30 pips target. This strategy is build up with stochastic indicator with price action candle confirmation. Only stochastic oscillator can give false entry setup but candlestick pattern gives the signal confirmation. Let's learn about this scalping trading strategy.

Required Indicators

1. Stochastic Indicator. Click here for Stochastic Indicator setup process

You should learn about Various Different Types of Candlesticks . Read some important articles about candlestick.

Click here to learn about Hammer and Hanging Man, Inverted Hammer and Shooting Star

Click here to learn about Dark Cloud Cover, Piercing Pattern, Bullish Engulfing Pattern, Bearish Engulfing Pattern

Buy Setup Rules

❑ Stochastic needs to start upward movement from oversold area.

❑ If stochastic moves above 20 level, then wait for bullish candlestick confirmation.

❑ You need to wait for bullish candle like bullish engulfing, Bullish Marubozu, Pin bar or any bullish reversal candle.

❑ After bullish candle confirmation, place buy position.

❑ Set take profit as 10-30 pips.

❑ Set stop loss 3 pips below the bullish candle.

Sell Setup Rules

❑ Stochastic needs to start downward movement from overbought area.

❑ If stochastic moves below 80 level, then wait for bearish candlestick confirmation.

❑ You need to wait for bearish candle like bearish engulfing, Bearish Marubozu, Pin bar or any bearish reversal candle.

❑ After bearish candle confirmation, place sell position.

❑ Set take profit as 10-30 pips.

❑ Set stop loss 3 pips below the bullish candle.

Buy/Sell Setup Examples

In the above USDJPY M15 chart, stochastic moves from oversold area and at the same time, pin bar formed which indicates buy signal in this strategy. Since then market started moving in upward direction. On sell example, bearish engulfing was formed and stochastic also started downfall.


Time Frames: M15, M30.

Currency Pairs: Any pairs.

Risk Warning: This scalping strategy shouldn't be used on news time. Before using this strategy, you must know about candlestick pattern. Without proper knowledge of candle, you can't gain from this strategy. So learn candlestick pattern and apply this scalping trading system on your demo account before using on real account.

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