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OZ Trading Strategy with the Three Oscillator System

The OZ trading strategy is a trend reversal trading system using three oscillator indicators: Stochastic Oscillator, Accelerator Oscillator (AC), and Awesome Oscillator (AO). This strategy is claimed to be a powerful and magical trading strategy, offering significant profit potential when applied correctly. Here is a comprehensive guide to the OZ trading strategy.

Basic Preparation for the OZ Trading Strategy

  1. Time Frame and Currency Pairs:

    • Time Frame: Daily or H4.
    • Currency Pairs: Can be used on any currency pair, but many traders use it on EUR/JPY.
  2. Technical Indicators:

    • Awesome Oscillator (AO): Use the default settings.
    • Accelerator Oscillator (AC): Combined with the Stochastic Oscillator.
    • Stochastic Oscillator: %K period = 5, %D period = 3, and slowing = 4.
  3. Setup in Metatrader:

    • Select Accelerator Oscillator from the menu (Insert – Indicators – Oscillators – Accelerator Oscillator).
    • Drag the Stochastic Oscillator from the Navigator window and drop it onto the Accelerator Oscillator to merge them.

Basic Rules of the OZ Trading Strategy

  1. Entry Signal:

    • Buy Position:
      • Stochastic Oscillator crosses the 20 level from below.
      • Accelerator Oscillator (AC) and Awesome Oscillator (AO) turn green.
    • Sell Position:
      • Stochastic Oscillator crosses the 80 level from above.
      • AC and AO turn red.
  2. Example of Entry Signal on Chart:

    • For a Buy Position: Wait for the Stochastic to cross above the 20 level and for the AO to turn green. Enter a buy position at the opening price of the next candlestick.
    • Sell Position: Wait until the Stochastic crosses the 80 level and AO turns red. To open a sell position, execute the trade at the opening price of the next candlestick.

Money Management for the OZ Trading Strategy

  1. Position Opening:

    • Open five positions based on confirmed signals.
  2. Stop Loss and Take Profit:

    • Stop Loss: Set at 100 pips for each open position.
    • Take Profit:
      • First Position: Take profit at 50 pips and move all Stop Losses to Break Even (BE).
      • Second to Fourth Positions: Take profit at 100 to 200 pips.
      • Fifth Position: Let it run until an opposite entry signal is generated.

Example Chart for Entry Position

  • Buy Position:
    • Stochastic crosses the 20 level from below, AO and AC turn green. Open a buy position at 126.24 and take profit at 129.3.
  • Sell Position:
    • Stochastic crosses the 80 level from above, AO and AC turn red. Open a sell position at 116.97 and close the position at 105.2.

The OZ trading strategy can yield good profit results by combining three oscillators. However, making precise decisions and applying discipline in money management is crucial. Ensure to promptly move the remaining positions' Stop Loss to Break Even after the first position reaches Take Profit.

Using this strategy requires a solid understanding of oscillator indicators and disciplined observation of entry and exit signals. With a cautious approach and good risk management, the OZ trading strategy can be a powerful tool in your trading portfolio.


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