Stochastic oscillator trading strategy with RVI

Stochastic and RVI (Relative Vigor Index) both indicators measure overbought and oversold area of the market movement. From this trading strategy, you can take entry from overbought and oversold area. From those levels, you will get reversal signal of the market. So it will be profitable if you can catch reversible trade from this strategy. With the combination of these two technical indicators, you will get buy and sell signals.

Required indicator:
(1) Stochastic Oscillator
(2) RVI (Relative Vigor Index) indicator.

How to get buy signal
You will get buy signal from oversold area. When Stochastic makes crossover on the oversold area at 20 level, then you need to wait for confirmation from RVI indicator. When RVI makes crossover in the up direction in the low level, then you will get confirmation for buy signal.

How to get Sell signal
You will get sell signal when markets moves to overbought area. When Stochastic makes crossover on overbought area at 80 level, then you have to wait for confirmation from RVI indicator. When RVI makes crossover in the down direction at high area, then you will get sell signal confirmation.



Time frame: H1, H4 is suitable. You can use on other time frame.

Currency pairs: All pairs.

Take profit and Stop loss: You can set 50-80 pips take profit on major pairs. For cross pairs, you can set 100-150 pips take profit. You can close your buy trade when stochastic and RVI comes to overbought area. Similarly, you can close your sell order when stochastic and RVI downs to oversold area.
You can set stop loss below recent support for buy entry. For sell entry, you can set stop loss above recent resistance.

Risk warning: After getting confirmation from both indicators, you have to take entry. So without confirmation, you can’t take entry. You also need to avoid this Stochastic and RVI strategy at the news time. You have to follow money management theory for following this strategy. Try this Stochastic and RVI strategy on your demo account. If you are satisfied with this strategy, then you can use this on your real account.