Stochastic Indicator - Ultimate Guide
► Text Format (Stochastic Indicator Guide) - https://vladimirribakov.com/stochastic-indicator-guide/
► Divergences Tutorial - https://vladimirribakov.com/forex-for-advanced-complete-guide/

Stochastic Oscillator is one of the most commonly used indicators among traders. It measures the momentum of the financial instrument and it moves between the fixed levels of 0 and 100.

Stochastic Oscillator could be used in various ways to spot: divergences, overbought/oversold conditions, crossovers and more.

When the indicator is located at the top near the 100 level, it says to us that the current price is trading near or above the highest high of the look-back period. Vice versa for the bottom part – the current price is trading near the lowest low of the chosen historical period.

► Drawbacks of Stochastic
The main problem with Stochastic would be that it is too sensitive and it would give a lot of premature signals.

Often when there is a strong trend it would give you an indication that the market is overbought or oversold (exit signal) and you might get out of a good trade too early.

On the other hand, when used as an entry signaler, it might give you signals too early.



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Vladimir Ribakov
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