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Today, In this article I am going to cover one of the most powerful trading tools which is widely used by traders worldwide i.e. Stochastic Oscillator.
A Stochastic Oscillator is a trend indicator which helps traders to identify an upcoming trends and reversals using the two moving averages lines. with this indicator, you can not only identify the upcoming trends and reversals but you can even find the strength of the particular trend.
What is a Stochastic Oscillator?
As said above, a Stochastic Oscillator is a trend indicator made from the two average lines which oscillates around the overbought and oversold levels with an indicator line above 80 signals an ongoing bullish trend similarly, with indicator line below 20 signals an ongoing bearish trend.
You can even use the indicator to verify the strength of the trend, with % D line above %K line representing a bullish domination while % D line below %K line representing a bearish domination.
How to Insert Stochastic Oscillator in Pocket Option Chart?
Stochastic Oscillator is a free-to-use trading tool which means you can even use this indicator on trading demo account, Now, In order to insert Stochastic Oscillator in Pocket Option Chart follow the steps below
1> Registration: The first and foremost step is to create a brand new Pocket Option using this link. Signing up with this link has multiple benefits such as free signals plus premium support.
2> Access Trading tools: Next, click the indicator button at the top of the page.
3> Find the indicator name in the list: Thirdly, find the Stochastic Oscillator in the list.
4> Configure: Lastly, click the name and configure the indicator based on your trading requirements.
How to find Trends using a Stochastic oscillator
Here, I assume that you at least know the basics of candlestick charts, In case you don't read this article.
Stochastic oscillator is a Momentum indicator which helps traders to identify the trend using overbought and oversold levels.
When the oscillator is above 80 it suggests that the asset might be in over sold zone and you can use this opportunity took place short-period buy trades.
Similarly, when the oscillator is below 20 it suggests that the asset might be at an overbought zone and you can use this opportunity took place short period sell trades.
Using Cross Overs
Crossovers are one of the most important components, with crossovers you can verify the strength of the trend.
When the %K line intersects above the %D line it signals a bullish trend vice versa, when the %K line intersects above the %D line it signals a bullish trend.
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