Indicator Hacker System 2017

The Indicator
Hacker System
The Indicator Hacker System
In this guide, I’ll show you a simple, very reliable way to enter a trend-
following Forex trade.
There’s a general wisdom in trading that we should ‘follow the trend’ – it

sounds easy, but in practice, many traders get in just too late, when the
trend is having a pull-back. Or they get in too early, when the new trend
isn’t properly established.
This method avoids those problems, because it waits until the trend is
established, and spots the moment that that trend is about to accelerate
away – and it rides those short burst of activity.
That way, we get to ride the most profitable moments in a trend, and we
get to keep out of the trend when its direction is less than clear.
To do this, we’ll be using a very popular indicator – the Stochastic. But we

won’t be using it in its normal format. Instead we need to ‘hack’ it –
changing its settings to suit our needs.
I don’t usually recommend mucking about with indicator settings – if you

want to use the Stochastic as a regular ‘overbought’ or ‘oversold’
indicator, as many people do – then don’t use these ‘hacked’ settings.
But, for our purposes, they work beautifully …

The hack
First off, you’ll need to adjust the settings on your charting platform.
Here, I’m using Core Spreads as that’s my preferred trading platform –

they have fast, reliable execution, and lower trading costs than most
other brokers. If you don’t have an account with Core Spreads, you can
open one HERE.
Core Spreads benefits:
• Advanced charts as standard

• Loyalty reward scheme
• Welcome bonus
• No deposit and withdrawal
charges
• Tight spreads
• Brand new apps for iOS and
Android
T&Cs apply
You can also open a demo account with Core Spreads, but if you want the
special indicator settings to be saved, I recommend that you use the full
version of their demo account rather than the one-click demo account
they advertise on their home page.
If you prefer to use this system on another platform, that’s fine (but do
watch your trading costs, and check what spread you’re paying).
Open up an hourly chart. This can work on any Forex pair, but – again –
watch your costs. I prefer to stick to pairs that have low spread costs, as
an expensive spread makes it much harder to clear a decent profit.
In the ‘Studies’ drop-down menu, select Stochastic, and then change the
Period setting from ‘14’ to ‘5’ – as shown below …
Then add a moving average, with a period of 50 to your chart.
Your chart should now look something like this …

Now your ‘hack’ is in place, and you’re ready to start spotting signals.
The signal
#1 rule: If the price is below the 50MA, we’re looking for a SELL signal. If
the price is above the 50MA, we’re looking for a BUY signal.
#2 rule: A SELL signal requires a double top on the fast Stochastic, where
the second spike is smaller than the first.
#3 rule: A BUY signal requires a double bottom on the fast Stochastic,

where the second dip is smaller than the first.
Here’s how it works …
In the chart on the left, the price

is below the 50MA, so we’re
looking for a SELL signal.
We have a double top formed on

the fast Stochastic (the black line),
with both spikes above the 80
level, AND the second top is
lower than the first top.
This is our signal to sell.
We enter the trade as soon as the

fast Stochastic crosses the slow
stochastic (i.e. the black line
crosses the red line).
Here’s how it works for a BUY trade …
This time, the price is above the

50MA, so we’re looking for a BUY
trade.
The fast Stochastic forms a double

bottom, with both extremes below
the 20 level. The second bottom is
higher than the first.
This is our signal to buy.
We enter this trade as soon as the

black (fast) Stochastic crosses the
red (slow) Stochastic.
The trade parameters
Getting the entry signal right is just one part of achieving a successful
trade – how you exit is just as important.
We’re not looking to ride huge moves with these trades. We are using
tight stops, and taking advantage of small surges of momentum.
The result is that we’ll be trading with a great risk-reward profile, and an
excellent chance of success.
Here’s how we calculate our stop level and profit target …
The stop: our stop level is the distance from our entry point to the recent
extreme (associate with the second top or bottom), plus 5 pips.
The profit target: the distance to our profit target is the same as the
distance to our stop.
Here’s an example …
Here, the price is below the moving average, so we’re looking for a SELL
trade.
When the double-top forms on the fast Stochastic, with the second peak
lower than the first, we have our signal. Once the fast Stochastic has
moved below the slow line, we can enter our trade at 14641.
The stop loss is positioned 5 pips above the recent high associated with
our second top, at 14671. This is 30 pips from our entry. Therefore our
profit target is set 30 pips below our entry.
Enhancements
The system above is set up with a simple 1:1 risk-reward. So, our
potential risk on a trade is equal to the potential reward.
It is possible to improve this ratio by using the Average True Range. This
indicator tells us whether the market is likely to make a bigger or smaller
move.
To check out the ATR, you’ll need to flick over to a daily chart, and bring
up the ATR option under the ‘Studies’ drop-down menu. Then you can
read off the ATR for that day …
It’ll look something like this …
In the example above, the reading is 82 – this is the average number of

pips this instrument moves in a day (based on the last 14 days trading).
We then use this information to evaluate how far we can expect the
market to move. If our distance to the stop level is 40 points, and the ATR
is 82, then it’s a push to expect the market to move another 40 points for
us.
However, if our distance to the stop is 10, and the ATR is 82, then we
could do well with a wider target.
Here’s a method for calculating a potential target …

( Daily ATR – Distance to stop )  2
This tell us how much further the price potentially has to move, in the
short term. And, by dividing the result in half, we’re not being too greedy.
I’d add to this calculation, the proviso that I wouldn’t take trades with a
risk-reward profile outside of the range 1:2 to 2:1
(i.e. the profit target shouldn’t more than twice the distance to the stop.
Nor should it be less than half the distance to the stop.)
If the profit target is more than twice the distance to the stop, simply
reduce it to 2x distance to stop.
If the profit target is less than half the distance to the stop, then the risk
for this trade is too great, so sit out of the market.
Moving on
This document just scratches the surface of what can be achieved using
these indicator signals.
You can find out much more about trading methods, enhancements and
strategies on the Trader’s Bulletin site. Don’t forget to look at the whole
library of free resources available. Plus, membership is entirely free, so
make sure you’re signed up on the site.
Publisher’s Notes
All rights reserved. No reproduction, copying or transmission of this publication may be made without
written permission. No paragraph of this publication may be reproduced, copied or transmitted without
written permission, or in accordance with the Copyright Act 1956 (amended).
Spread betting carries a risk to your capital, and you may lose more than your initial stake. Ensure
that you fully understand the risks involved prior to trading and seek independent financial advice if
you have any doubt in the suitability of your speculation. Only speculate with money you can afford to
lose. The Indicator Hacker System and Trader’s Bulletin are published by Thames Publishing Ltd its
products and representatives do not provide individual investment advice. Therefore any information
provided by the company’s products or representatives or publicity material are not to be read or
taken as any form of trading advice nor a solicitation to trade and is designed for educational
purposes only.
In the UK you may wish to open a spread-betting account to trade the strategy outlined in The
Indicator Hacker System. Thames Publishing Services recommend Core Spreads as we believe they
are the best broker to use for this strategy, however it is possible to use other platforms if preferred.
Thames Publishing Services Ltd receives a commission from Core Spreads.
The user agrees that the author and publisher will accept no responsibility or liability for any
loss/losses caused either directly or indirectly as a result of using the product or following its signals
or methods generally. This includes any errors or omissions.
Copyright © Thames Publishing Ltd 2016
Financial spread bets and CFD trades are leveraged products, which means you could lose more
than you deposit. You should ensure spread betting and CFD trading meets your investment
objectives. Full risk warning(https://www.corespreads.com/risk-warning/). Core Spreads Ltd is an
appointed representative of Finsa Europe Ltd (a company registered in England and Wales under
number 07073413) which is authorized and regulated by the Financial Conduct Authority (under firm
reference number 525164). Core Spreads is a trading name of Finsa Europe Ltd.

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The Indicator

There’s a general wisdom in trading that we should ‘follow the trend’ – it

To do this, we’ll be using a very popular indicator – the Stochastic. But we

I don’t usually recommend mucking about with indicator settings – if you

But, for our purposes, they work beautifully …

Here, I’m using Core Spreads as that’s my preferred trading platform –

Core Spreads benefits:

• Advanced charts as standard

Your chart should now look something like this …

#3 rule: A BUY signal requires a double bottom on the fast Stochastic,

Here’s how it works …

In the chart on the left, the price

We have a double top formed on

This is our signal to sell.

We enter the trade as soon as the

This time, the price is above the

The fast Stochastic forms a double

This is our signal to buy.

We enter this trade as soon as the

Here’s how we calculate our stop level and profit target …

It’ll look something like this …

In the example above, the reading is 82 – this is the average number of

Here’s a method for calculating a potential target …

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