Ways to use the Stochastic Oscillator in a trading operation
Introduction
With this post, I continue the previous post on Stochastic Oscillator, this time I will describe in detail two ways to use the Stochastic Oscillator in trading operations.
In theory, using the Stochastic Oscillator is relatively simple, this because it works as an indicator of price action, hence its valuable utility when making decisions to open or close operations (buying or selling a cryptocurrency or any other financial instrument).
However, the ideal is to use the Stochastic Oscillator in conjunction with other indicators, namely; volume, exponential moving averages, among other indicators of equal or greater technical scope.
Moments of SELLING
One way to use the Stochastic Oscillator in a trading operation, is when we are in possession of equis amount of a certain cryptocurrency, or any other financial instrument, and after a series of bullish impulses are generated consecutive readings of high impulses in the Stochastic Oscillator with bearish crossover, and subsequent entry into range within the scale, behavior that we can interpret on the chart as a signal of Over-Buy, so, opening a SELL operation will represent an option to take profits.
Moments of BUYING
Another way to use the Stochastic Oscillator in a trading operation, is when a certain cryptocurrency, or any other financial instrument is in constant depreciation with contrastable action in charts with bearish trends, so, when the Stochastic Oscillator reaches the lowest area, and then enters the range within the scale, this action can be interpreted as a signal of Oversold, so, opening a BUY operation will represent an investment option.
One point to note is that, as with the rest of the indicators, it is advisable to use the Stochastic Oscillator in combination with other technical indicators, in order to get a better view of the price action.
SOURCES CONSULTED
➊ Ng Ee Hwa Trading strategies using Stochastic. Link
OBSERVATION:
The cover image was designed by the author: @lupafilotaxia, incorporating image background: Source: Medium
hello @lupafilotaxia,
this is the first indicator I used when I started buying and selling cryptocurrencies, despite its simplicity it is very practical when determining the price of a cryptocurrency, on the other hand I know that determining the future of a trade operation is difficult so knowing the correct indicator and the correct information of the project gives us an advantage in operations, personally I think these indicators are a guide to what could happen with the movement of a currency but is not a guarantee of being able to beat the market.
Hello @trabajosdelsiglo
In my case I had never used it, until recently I started using it and the results of hits have improved a lot, you can never win everything to the market but nevertheless, being patient and not rushing improves our options to add gains.
Best regards, be well.
Greetings friend @lupafilotaxia, usually I really like to read publications concerning trading, in this case I really like the publication you make concerning the stochastic oscillator, it is a technical indicator that generates very good market signals, concerning the times of entry in buying and selling, that in the company of other indicators can work perfectly, very good your publication thanks for sharing this information.
Hello @chucho27
Yes, I also like the stochastic oscillator, precisely because it is a technical indicator that generates very good entry and exit signals, currently I have been adjusting the strategy mixing several indicators.
Best regards, be well.
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