How the stochastic oscillator works
The stochastic oscillator
works by looking at the price behaviour of an underlying currency pair. It’s a leading forex indicator for when a change in trend is likely in the price of a currency pair.
It works on the premise that when a currency pair price gets overbought, closing prices tend to trade at their daily highs and when a currency pair prices gets oversold, closing prices tend to trade at their daily lows.
The stochastic oscillator uses two lines: %K (the stochastic oscillator) and %D (the moving average).
%K looks at the current closing price and the lower low of the past eight days along with the highest high of the past eight days.
Make explosive Forex profits with this tiny book!
Find out more here!
It takes a match to start a forest fire.
It takes a little seed to create an entire human being.
And it takes this tiny book to make you a Forex income to last a life time!
If you want to read more about how the stochastic oscillator works, click here
How to use the stochastic oscillator to buy and sell
The stochastic oscillator generates a buy signal when the %D line crosses the %K line from below to above, and this is under the 10 line.
The stochastic oscillator generates a sell signal when the %D line crosses the %K line from above to below, and this is above the 90 line.
You can set the parameters of the stochastic oscillator on the platform you use. The settings that work best with forex trading is 8, 3, 3. The default setting is 5, 3, 3.
So there you have it. How to use the stochastic oscillator to generate buy and sell signals.
*********** New release ************
Urgent notice: Only 50 seats available
You’re invited to the first Forex 101 Workshop on 15 August 2015.
Timon Rossolimos will answer your common questions like:
How do I get started trading Forex?
How do I open an account with a Forex broker an which Forex broker is the best?
What are the best currency pairs I can trade?
Where can I find a demo account where I can trade Forex for FREE?
What is the best time-frame to trade Forex?
How does the Forex market work?
How do I make an income trading Forex?
Where can I find the best Forex trading strategies?
How much money do I need to start trading Forex?
How do I calculate my profit and loss when trading Forex?
And that’s exactly what Timon plans to answer on the day. It will be an absolute beginner, low price, step-by-step workshop to trading Forex.
There are only 50 seats available at this exclusive event and there’s high demand for this workshop.
So don’t waste another second and secure your seat at the first ever Forex 101 Workshop with your host Timon Rossolimos.
Reserve your seat now!