|
Stochastic oscillator converts the entire chart with a very specific way: Stochastics distorts the vertical axis of prices, and turns it into percentages.
Since the price can fluctuate only in the range from 0 to 100 %, we can see when the comes nearer to the imaginary 100 percent and when comes nearer to imaginary zero. In other words, Stochastics puts the price in absolute corridor.
There are three types of Stochastic oscillator:
• Fast
• Slow
• Complete
Stochastic oscillator displays 8 lines in one window.
Stochastic oscillator signals
There are some ways to interpret a Stochastic Oscillator
When the value of% K is above 80, it may be a sign to sell.
When the oscillator is below the level (eg. 20), it could be a sign to buy.
The most significant signal of stochastic is a divergence, which occurs when the price shows growth as an indicator - a fall, or on the contrary.
How to use:
This indicator is intended to distinguish the correction from a trend reversal. If all the lines of the indicator in the same direction, the price will go in that direction. If a faster line (light) changes direction is a reason to think. If stochastic long periods do not respond, perhaps the trend continues. If all lines intersect in one place is a high probability of changing trend.
In general, the indicator is very useful for day trading. If other timeframes adjusted to yourself.
Parameters:
kPeriod1 ... 8 - kPeriod of each line.
dPeriod calculated as dPeriod = kPeriod / 2, slowing = dPeriod / 2.
In my opinion the best parameters for this indicator. If someone does not like, you can define these parameters as extern. If they are not equal to zero, they will not change.
modeSignal - Draw a signal line or main. By default, draws a signal. In my opinion, so the charts looks more clearly.
countLine - The number of lines.
Conclusion
Stochastic Oscillator or stochastic is a specific and complex technical indicator that reflects the current position of prices relative to a range of the prices for the certain period.
|
