Stochastic Lines Crossing
Joseph
Stochastic Lines Crossing
Here is a basic look at a role of a Stochastic indicator in Forex trading.
Knowing exactly what to expect from Stochastics, if at any point you plan to add it to your own system, will affect your trading results dramatically.
Currency Pairs : Any
Graphic : Any
Indicators : Stochastic (14, 3, 3)
Entry Conditions
Buy when the faster Stochastic line crosses above, above the slower moving Stochastic line.
Exit Conditions
Sell ​​when the opposite situation (the next crossover) occurs and right after this open an opposite position.
Again it is recommended, once the first contact of the Stochastic lines has been detected (possible crossover in the future), wait until the next price bar on the chart has closed and only then proceed to act.
Advantage
It can give entry and exit rules, easy to use.
Disadvantages
The Stochastic is a lagging indicator or delayed - with this system crosshatching can create many false signals. It is recommended that traders change the regular Stochastic settings for each particular currency pair, to eliminate as many false signals as possible.
The Stochastic crossover system is useful when used in conjunction with other indicators.
