Customizing Stochastics for trading Forex and CFDs
One of mostly regularly followed trend indicators is the Stochastics Oscillator. It measures the distance between a stock’s closing price and the range of highs and lows over a specified period. As the stock closes nearer the high of the range, the Stochastic Oscillator rises, and as the stock closes nearer the low of the range, it falls.
Proponents tend to like the Stochastic Oscillator because of its easy-to-remember defined range of 0-100, its support and resistance indications, and its ability to signal divergences in share movement. According to its developer, Dr. George Lane, the Stochastic Oscillator moves into overbought and oversold areas above 80 or below 20, respectively.