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🚨 Volatile Markets? Find Hidden Gems for Serious Outperformance
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Mastering Stochastics in One Class
Thursday, December 19, 2019
Expert: ALAN GREENWALD Hosted by: LegacyFX- Forex
- Cryptocurrency
- Technical Analysis
- Beginners
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Stochastics is one of the oldest and most reliable indicators available. It works well in short- and long-term time frames. Forex traders, bitcoin traders, stock and bond investors and CFD traders all rely on this indicator
In general, the area above 80 indicates an overbought region, while the area below 20 is considered an oversold region. A sell signal is given when the oscillator is above the 80 level and then crosses back below 80. Conversely, a buy signal is given when the oscillator is below 20 and then crossed back above 20. 80 and 20 are the most common levels used but can be adjusted as needed.
A crossover signal occurs when the two lines cross in the overbought or oversold region. A sell signal occurs when a decreasing %K line crosses below the %D line in the overbought region. Conversely, a buy signal occurs when an increasing %K line crosses above the %D line in the oversold region.
Divergences form when a new high or low in price is not confirmed by the Stochastic Oscillator. A bullish divergence forms when price make a lower low, but the Stochastic Oscillator forms a higher low. This indicates less downward momentum that could foreshadow a bullish reversal. A bearish divergence forms when price makes a higher high, but the Stochastic Oscillator forms a lower high. This shows less upward momentum that could foreshadow a bearish reversal.
John Roman
John is an active trader and educator at Investors Trading Academy with an MBA in Finance from New York University. He began trading in 1995 focusing mainly on commodities and options, then transformed into forex investment. His current specialization covers all aspects of forex trading utilizing fundamental and technical analysis, namely chart pattern analysis. Mr. Roman has conducted training seminars on all over the world from novice to innovative strategies. He provides a solid, collaborative and extremely encouraging training atmosphere to assist Forex traders in locating and trading momentum moves, using confirmed patterns and methods.
In general, the area above 80 indicates an overbought region, while the area below 20 is considered an oversold region. A sell signal is given when the oscillator is above the 80 level and then crosses back below 80. Conversely, a buy signal is given when the oscillator is below 20 and then crossed back above 20. 80 and 20 are the most common levels used but can be adjusted as needed.
A crossover signal occurs when the two lines cross in the overbought or oversold region. A sell signal occurs when a decreasing %K line crosses below the %D line in the overbought region. Conversely, a buy signal occurs when an increasing %K line crosses above the %D line in the oversold region.
Divergences form when a new high or low in price is not confirmed by the Stochastic Oscillator. A bullish divergence forms when price make a lower low, but the Stochastic Oscillator forms a higher low. This indicates less downward momentum that could foreshadow a bullish reversal. A bearish divergence forms when price makes a higher high, but the Stochastic Oscillator forms a lower high. This shows less upward momentum that could foreshadow a bearish reversal.
John Roman
John is an active trader and educator at Investors Trading Academy with an MBA in Finance from New York University. He began trading in 1995 focusing mainly on commodities and options, then transformed into forex investment. His current specialization covers all aspects of forex trading utilizing fundamental and technical analysis, namely chart pattern analysis. Mr. Roman has conducted training seminars on all over the world from novice to innovative strategies. He provides a solid, collaborative and extremely encouraging training atmosphere to assist Forex traders in locating and trading momentum moves, using confirmed patterns and methods.