Stochastic Indicator

Discussion in 'For novice traders' started by Tengkorakfx, Sep 23, 2017.

  1. Tengkorakfx

    Tengkorakfx Member

    Stochastic indicator allows trader to measure saturated condition of buyer (overbought) and saturated seller (oversold) in forex market. The indicator is calibrated from 0 to 100. And, if the stochastic line is above the 80 mark, it indicates that the currency pair is at the buyer's saturation point. Or, if the stochastic line is below the 20 mark, it indicates that the currency pair is at the saturation point of the seller.

    Thus, 20 and 80 marks are called "trigger points". It is important to note that the basic guideline when using stochastic to identify trading opportunities in the market is to enter a long (buy) position when the stochastic line is below the 20 mark and enter the short (sell) position when the stochastic line is above the 80 mark.

    For example, when the indicator has been overshadowed above the 80 mark occasionally, then it is very likely that the downside reversal is imminent.
     
  2. andengireng

    andengireng Member

    Stochastic indicator has two lines: the% K line and the% D line. For ease to distinguish it, usually both are given different colors. Commonly used colors are light blue for% K and red for% D. In addition,% D is also usually shown as dashed lines. Of course the colors that you can later change according to taste, which is important later you can distinguish which% K and which% D.
     
  3. Tengkorakfx

    Tengkorakfx Member

    Do you used this indicator, dude? how is the percentage profit result? please share with us. :D
     
  4. andengireng

    andengireng Member

    The advantage of the stochastic indicator is to give a signal if the price of the stock movement experiences weakness or decline. So investors can take action for the possibilities that will occur. The stochastic indicator can be used when sideways market conditions or when the market conditions are flat. Besides being able to be used when the price weakens and is flat, the stochastic indicator can also be used when the market conditions are profitable or when the market conditions are favorable.
     
  5. NewbieTrader

    NewbieTrader Member

    I tried reading his reply, i don't think he's sharing it with us :D hahahah. this is his trading secret.
    anyway, i am still getting to know this indicator. forex trading is a huge world to explore.
     
  6. andengireng

    andengireng Member

    Yes, This indicator is on your MT4, just attached it. K&D is the default number of stoch Indicator in your MT4. Ya, maybe tomorrow I will make a new thread about how to use Stochastic with my style.
     
  7. NewbieTrader

    NewbieTrader Member

    awesome! thanks for this, mate. will look forward to your new thread. please share the link to that new thread here as well so we all can learn together :) cheers!
     
  8. Tengkorakfx

    Tengkorakfx Member

    Cheers...
    You can also combining this method with another indicators as a confluence. For example using a Bollinger band indicator and waiting the price to hit lower band as well as the oversold level...
     
    NewbieTrader likes this.
  9. broforex

    broforex Member

    The stochastic indicator is known as a trend detector. Because it can identify before the trend occurs, making indicators in demand by many traders. But it's so troublesome if you have to analyze one by one in every Time Frame.
     

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