How the Stochastic oversold in up-trend strategy works
The stochastic oscillator compares the close with the high–low range of the last 14 bars. Values under 20 mean price is near the bottom of its recent range. Combined with a trend filter (close above SMA 50) it becomes a simple dip-buying system.
Rules
- Buy when %K(14) crosses above 20 while the close is above SMA 50.
- Exit when %K crosses above 80, or at a 4% stop-loss.
Backtests use historical data and simplified fills. Past performance does not guarantee future results. Education only — not investment advice.