Tutorial for learn trading with Stochastic Oscillator.

Stochastic Oscillator created by George C. Lane at the end of 1950’s. This indicator is used to determine the market situation at the last price before a switch in trend happened at a certain time. This indicator is also used to determine the strength of the relationship of the last market price against time. Mathematically, Stochastic Oscillator is defined as:
Recent close – Lowest Low
%K =
[
Highest High – Lowest Low
] x 100
At a certain period of time
Recent close = price closing at the end
Lowest low = lowest price for a certain period of time
Highest high = highest price for a certain period of time

SETTING
In order to obtain the graph indicator as above, you must take a few steps to set your indicator.
You can follow these settings:-
Step 1
Click INSERT and then INDICATOR then OSCILLATORS and then STOCHASTIC
OSCILLATOR and a box will appear on your screen.
Step 2
Click PARAMETERS and follow these settings:
• %K period = 5
• %D period = 3
• Slowing = 3
• Price Field = Close/Close
• MA Method = Linear Weighted
• Fixed Minimum = 0
• Fixed Maximum = 100
Step 3
Click COLORS and follow these settings:
• Main = Light Sea Green
• Signal = Red
Step 4
Click LEVELS and follow these settings:
• Level = 30
• Level = 70
• Level = 50
• Style = Silver
Step 5
Click VISUALIZATION and follow these settings:
• Click ALL TIMEFRAMES box and SHOW IN DATA WINDOW box
HOW TO USE STOCHASTIC OSCILLATOR
How to use Stochastic Oscillator? Actually it’s not difficult to use because through this method you will know the market situation at that time whether it is OVERBOUGHT or OVERSOLD. It is not difficult to determine whether a market is OVERBOUGHT or OVERSOLD. With Stochastic Oscillator, you can determine it. When a Stochastic Oscillator is nearing or passing 70th line, the market trend is said to be OVERBOUGHT and when it is nearing or passing 30th line, the market trend is said to be OVERSOLD.
In order to make sure there is no mistake when opening a position whether to BUY or SELL, you are advised to make sure this criteria is followed:
OPEN BUY POSITION - Make sure Stochastic Oscillator touch the ground. It means make sure stoch reach at line 0
- Make sure stoch crosses from line 0 first before you enter or open BUY (LONG) position at the pair that you have chosen
- Close your position after stoch raised to line 100 or reached the rooftop.
- If stoch doesn’t touch line 100 and stoch crossed at the line before 100, I would like to advice you to keep on taking advantage on the profit at that time without waiting the stoch to get near line 100 because there might be a sudden change of trend. Please refer to the graph below.
OPEN SELL POSITION - Make sure Stochastic Oscillator reach the ceiling or rooftop. It means you must make sure stoch reach line 100.
- Make sure stoch cross from line 100 first before you enter
SELL (SHORT) position at the pair that you have chosen.
- Close your position when the stoch goes below line 0 or reach the ground.
- If the stoch doesn’t reach line 0 and it has crossed at the line above line 0, I would strongly suggest that you keep on taking advantage of the profit at that time without waiting for the stoch to reach near line 0 because there might be a sudden change of trend. Please refer to the graph below.
Through this method, you can apply to all TIMEFRAME that you want but the most ideal timeframes are H1, H4, D1, W1 and MN.
Tutorial for learn trading with Stochastic Oscillator.
In order to avoid mistakes when entering your position, here I would like to give a few guidance regarding stochastic oscillator that you need to follow:
• It is best that you enter position LONG or SHORT when stochastic really crossed each other
• Make sure you enter the position when stochastic touches the ground (nearing line 0) or touches the ceiling (nearing line 100) only.
• Avoid from entering position LONG or SHORT when stochastic has passed line 50 no matter if the stoch is still going up or down. There might be a sudden change in trend.
• Make sure you refer to all TIMEFRAME in order to avoid any mistake when you enter trend. Begin from bigger TIMEFRAME to smaller. For example MN, W1, D1, HR, H1, M30, M15 M5 & M1.
Make sure you take profit when stochastic crossed, no matter if the stochastic is nearing line 100 or line 0. It is to avoid FALSE SIGNAL in the middle of the trend as shown in the graph above where the trend changed in the middle of stochastic,( filter trades on higher  time frame in trend's direction. ).
• Lastly, be confident with the position decision that you have entered by being relaxed.
Follow and believe in the indicator that you are using.
Tutorial for learn trading with Stochastic Oscillator

In the picture above there are many false signals you can filter trades on higher  time frame in trend's direction.

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