Be ing a momentum oscillator, Stochastic can help determine when a currency pair is overbought or oversold. In the previous article, we have traving the background, the calculations involved, and how to use and read the Stochastics indicator. Traders use the indicator to determine overbought and oversold conditions and the beginnings and endings of cycles in the forex market.Forex traders focus on the Stochastics key points of reference, which are highpoints, lowpoints, divergences, and occasionally crossovers.
Article Summary: Creating a Forex trading strategy does not have to be a difficult process. Today we will review a simple Stochastics strategy for trending markets.When choosing a trading strategy, new traders often become confused by all the variables and indicators available to consider. Ultimately the key to trading success is finding a simple strategy shstem you understand, and have the trzding to replicate. The most commonly used range for the slow stochastic indicator is 14.
The slow stochastic formula is calculated as follows. If you plan on using 14, you will stochastic simple trading system to find the highest and lowest values over the last 14 trading bars. Please do not pop out excel and start cranking through slow stochastics calculations using raw market data. I have decided to remove all the links in this post and thread again. I hope this time its not moved.
Making money is all about being in sync with the markets. This system earns me 150 pips each week for the last four months. However, its no guarantee it will work for you.A quick word before I start: Trading is an art not a science.