Traders tend to use many indicators without researching or knowing what they are and how are they calculated. You can use stochastics oscillator to measure the speed and momentum of a price over a time period. A low stochastic forex pdf point to the strong uptrend as much as it points to a strong downtrend. A high value points to the strong downtrend as much as it points to a strong uptrend.

Stochastic oscillator works best when used with leading indicators, chart patterns, and volume and price movement. A stochastic oscillator is a momentum indicator comparing the closing price of a security to its price range over a specific period of time. It is one of the earliest technical oscillators in securities trading used to predict future market direction. Oscillator’ refers to repetitive variations up or down the equilibrium position.

K tracks the most recent market rate for the currency pair. It is important to grasp this concept right from the beginning. Once you understand, you will position yourself way ahead of other traders out there. All indicators built into a trading platform are being computed based on price data fed into that platform. If price isn’t recorded in the trading software, the indicators cannot be populated. All indicators are a different versions of the same data source. Equation and time sets might change but the core of all of the is the same.