Many traders underestimate the efficiency and ease of turning trade using stohastychnaga oscillator. Stohastyka – one of the best indicators that can determine when the currency or perakuplyaetstsa or resold. Using this indicator, you can determine if the trend is about to be back and to take advantage of this turn in the opposite direction.
Here's how this strategy works:
As discussed earlier, we simply use the conversion trend, therefore, if the currency is overbought, we sell or disadvantage, and vice versa, if the currency is resold, where we will buy or go long.
Stohastychny oscillator & # 39 is an ideal indicator for this type of strategy, but before we enter into the very strategy, let's leave the technical explanation of the way. Do not worry, it's a visual indicator, and you really do not need to fully understand the formula. The formula is provided so that you know how the "engine" that controls this oscillator.
The assumption of this technical indicator is that to the extent that, as the currency is close to 100 percent moving average will take a turn for the fall in the value down. The same goes if the price is close to 0 percent moving average value when the return will rise in price growth.
The indicator is constructed as follows:
This oscillator consists of 2 lines, slow line -% D, and fast line -% K.
Since this slower% D line is less sensitive than the line% K.
Line% D – is moving average of% K.
The signal line is provided trade% D.
These lines are shown in the graph in the range from 0 at the bottom of your diagram 100 in the upper part of the diagram, indicating absolute maximum and absolute maximum points, which can receive currency. In these two lines, you will find a line of 80%, and the line – by 20%. If the price exceeds 80%, it is expected to buy up, and if it is below 20%, it is expected to resell.
Now let's trading signals:
1. Determine where your support and resistance levels, it is important to know.
2. Check how extreme perakuplenasts or resale.
3. Wait for this crossover% K and% D in stohastytsy fast and in slow stohastytsy to confirm and enter the transaction.
4. Be sure to enter the stop using the resistance and support lines for their determination.
5. Take your profits early on to the next turn. You can use the following as a crossover signal "to make a profit."
6. It is in fact a lesson that I learned many years ago, not be broken, if you exit too early and receive less income than you might have. Keep in mind that you are never going to lose money, a profit no matter how much profit will be small.
As you can see, this strategy is very simple, but extremely effective.
Do not forget to combine the stochastic oscillator with the other indicators. Relative Strength Index and the group Bolingera work extremely well with the stochastic.
If you have an easy trading strategy, like sales, which we discussed, bids are fun, because if you do not emphasize the implementation of its strategy, you still get a big profit!