What Are Stochastics Indicator? https://financial-spread-betting.com/course/stochastics-indicator.html How Do I use Stochastics. PLEASE SUPPORT US BY LIKING THIS VIDEO IF YOU FOUND IT USEFUL
The other thing I want to look at is a Stochastic, which is very, very similar to an RSI, it is an oscillator.
Again, you will want to have a look at the formula, have a look on google, someone will explain it far better than me. It is very, very similar again it is taking price and it is giving you a kind of overbought and oversold condition. It is considered that if we go over 80 it is overbought and that if we go below 20 or below 10 it is considered oversold. The difference with the stochastic and the RSI is that you have got different parameters, so you can smooth it out with an average. You basically have your actual period then you have a smoothing element which is called K & D and they will smooth it out for you and give you like an average over the stochastic. So, you can look at the actual raw stochastic value. Look, it is very overbought there or you can look at the smooth version and again some people take trades as it crosses below, back under into – from an overbought into a neutral condition. Some people use it as a filter, it is entirely up to you.
My recommendation with any of these things is to put it on your chart and just see if it is something you like, as opposed to going up and reading about a strategy just using an indicator, try and integrate it into your own trading. Just pure price is king, guys, pure price is what it is all about. All of these are derivatives of price, volume and time. So, if you can get a feel for how price moves, how price responds to your key levels, how price responds to support/resistance, etcetera, then that is going to really help you more than anything else will, more than any indicator will.
One thing that I find very, very useful is obviously volume, it is something that is often overlooked but it is so, so important. So, let me get rid of stochastics on here, let me stick a volume back on. Understanding how volume interacts with price is something that will come with experience but if you can think about the more participants that are involved in a market the better, generally speaking that is going to give you a clue as to whether a market is going to continue if it approaches new highs or it is going to run out of puff. What I am not going to go into absolute finite detail here because I don’t want to cloud your judgement and the way you look at volume. I recommend this go away put volume on your chart, just capnotic chart and volume, maybe have an ATR on there, maybe go with one moving average. Don’t clutter your charts up too much. So, just understand the relationship of price range, which is your average true range, volume and actual price, how it responds.
Don’t forget your time of day. So, note on your chart when the market opens, when their lunch time period is, when it closes, when the US session is opening if you are trading a European session. Don’t clutter yourself up with too much stuff, you just keep an eye on what is happening and how the relationship with price is with volume, with time, etcetera.
Lesson 26: What is the Stochastics Indicator? How Do I use Stochastics
