I took 100 trades with MACD + STOCHASTIC Trading Strategy and the results were...
Doesn't work
No edge after realistic trading costs
- trades tested
- 1,740
- per trade after costs
- -2.22bp
- winners
- 40%
- years of data
- 14.7
After the Stochastic %K crosses below 20 (oversold), buy at the next bullish MACD crossover (MACD line above signal line), only if the entry candle is completely above the 200 EMA; mirror for shorts after %K crosses above 80. Stop just beyond the swing low/high, target 1.5R.
The exact rules we tested
- 01Instrument: GBPJPY | Signal timeframe: 30m | Direction: both
- 02Session: 00:00-23:59 (exchange tz), positions may hold overnight
- 03LONG sequence: 1. st.k crosses below 20 THEN 2. macd.line crosses above macd.signal (within 20 bars)
- 04SHORT sequence: 1. st.k crosses above 80 THEN 2. macd.line crosses below macd.signal (within 20 bars)
- 05Long filter: low > ema200
- 06Short filter: high < ema200
- 07Entry: market at next bar open
- 08Stop: last swing (strength 3) +/- 2bp
- 09Target: 1.5R (risk-multiple of stop)