How To Trade Breakout Of Trend Line With The Help Of Stochastic.

I shall go very simple!!!!! Just you need a stochastic. The setup of stochastic should be

Period 14, %k =3 and % D also 3.

You should Know drawing the trend line.

Here we shall take the breakout of only corrective move, what I mean by corrective move?

Corrective move is the correction phase of price, when market price is making higher highs and higher lows (confirming the uptrend).The corrective move will be in down and vice versa for down this way we shall only trade in trend.

Note: Price action plays a big role in trading, try to take the breakout of those corrections which are steep, because the breakout will have a strong momentum after breaking from the steeper correction.

Let us see in the chart to understand the corrective move.

In the uptrend:-
You can see here in the uptrend the market is making the correction (in the circle) to the down side and again breaking to the upside until the trend changes.

In the down trend:-The correction to the upside.

The strategy:-
As we know that when price goes above 80 level of stochastic we take it as overbought and when goes below 20 level, we take it as oversold level.
But we know that most of time the overbought and oversold confuses because of strong moment in the trend, so when the market is in the strong up trend we do not generate the sell signal when stochastic is showing overbought because it gets failed many times .We shall only look for the oversold reason in the uptrend to take a trade of breakout of this correction which comes with oversold and vise-versa in the downtrend.
Here I want to introduce a new level of stochastic, which is a part of my strategy, the level is 50 .Many charts give you the customization option to add level like MT4 but when we work in trading view or investing charting we do not have option to customize the level so we shall add a horizontal line to the 50 level of stochastic manually.
My motto is to filter the fake overbought and oversold reason to add the extra 50 level and we will only take the trade when market is overbought / oversold and after that stochastic should cross the 50 level to the downside in overbought condition and cross to the upside in the oversold condition to generate a probably strong sell and buy signal respectively.
Buy setup:-
Stochastic of given property (14, 3, 3) should be oversold and the valid correction to the downside in strong up trend.
Buy the breakout of correction when stochastic crossing to the upside of 50 level.
See the chart below.

Here the 50 level is drawn approximately by putting horizontal line manually.
Sell setup:-
Stochastic of given property (14, 3, 3) should be overbought and the valid correction to the upside in down trend.
Sell the breakout of correction when stochastic crossing to the downside of 50 level.
See the chart below.

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