Stochastics

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How to use Stochastics in your Trading whether it’s Stocks, Options, Forex, Futures Sign Up To
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Traders can use stochastics in several ways. It can be daunting for inexperienced traders using a simple method of series...and lot's more
stochastics as they can find themselves being whipsawed in and out of trades. One of the simplest methods of using
stochastics is to treat the %K line as a trigger. If the %K line crosses over the %D line to the upside, it is suggested
...a value of $99, but yours free.
you have a bullish signal. If however the %K line crosses over the %D line to the downside, it is suggested you have
a bearish signal.
First
This is too simple of course as you can see from the diagram below. A lot of the times stochastics will cross over, Name
only to cross back the next trading day. Email

A way to solve this problem is to only trade on the signals if they have reached an over bought, or over sold
situation, represented by the blue line zones (the top one is at 80 and the bottom at 20). The idea is to wait for Submit
stochastics to reach an over sold situation which is below 20, and then trade when either %K crosses over %D to
the upside, or %K crosses over 20 to the upside.

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Dean Whittingham

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"Good Day, Thank you for the

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Stochastics

informative emails, I enjoy reading

them and find them very informative
and enlightening...Ummar"

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As you can see, the trading opportunities were fewer but more profitable. Out of 5 possible trades, 1 (the first) was
significant, 2 ( the last 2) gave decent results, 1 was small and the other a loss. This is not too bad considering we
are only using stochastics and no other indicator.

The other dimension to stochastics is divergence. Have a look at how many times you can see divergence on the
chart above. Divergence happens quite often in stochastics, and the quicker the stochastics the more likely you
are to see divergence. To overcome this problem, I designed a way of reading stochastics that involves plotting
two stochastics on your charts.

I designed the system to be used in the forex market, however I feel it works better on stocks, as the stock
markets have a definite close of trading, where as the forex markets only really close for weekends. It is
definitely a great tool to add to your toolbox.

If you'd like to see a free downloadable video explaining how I use the system of two stochastics
then fill in the form below.

First
Name

Email

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