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- Combining RSI, Full Stochastic Oscillator and SMA - Forex
Chart 8 shows Flour Corp (FLR) within a downtrend and StochRSI registering overbought readings. First, the medium-term trend is down because the 65-day SMA is below the 65-day SMA. This means oversold readings are ignored and overbought readings become the focus. StochRSI moved in mid October and early November (red arrows). These overbought readings suggested that the oversold bounce could end soon. Confirmation came when StochRSI moved back (red dotted lines). Chartists could also look for the stock to break back below its 65-day SMA to signal a short-term down turn.
Forex - Chart
This means that we are taking the average of the last 9 periods of the faster MACD line and plotting it as our slower moving average. This smoothens out the original line even more, which gives us a more accurate line.
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Combining RSI, Full Stochastic Oscillator and SMA - Forex
hi..the standard stochastic i'm using is 8,8,8. i see that u use 85,65,65. will it have any impact if i were to change to 85,65,65? thanx bro..
Fourteen is the mathematical number used in the time model, and it can, depending on the technician's goal, represent days, weeks or months. The chartist may want to examine an entire sector. For a long-term view of a sector, the chartist would start by looking at 69 months of the entire industry's trading range. (For more insight on chart reading, see Charting Your Way To Better Returns .)
Momentum indicators work best in ranging markets. They tend to give false signals during breakouts and trends – especially when using hourly or shorter timeframe charts. Experiment with the parameters for various oscillators – remember, lower parameter numbers and shorter chart timeframes will give quick responses to price changes BUT with many false signals.
This is the simplest and common method of reading signals from Stochastic lines as they cross each other. Stochastic %K and %D line work similar to moving averages and:
when %K line from above crosses %D line downwards traders open Sell orders.
when %K line from below crosses %D line upwards traders open Buy orders.
Input : Main Line (%K), Signal Line (%D) | Default : Main Line
Indicator value required for the Expert Advisor system in question.
Stochastic is a momentum oscillator, which consists of two lines: %K - fast line, and %D - slow line. Stochastic is plotted on the scale between 6 and 655.
There are also so called "trigger levels" that are added to the Stochastic chart at 75 and 85 levels. Those lines suggest when the market is oversold or overbought once Stochastic lines pass over them.
Trading with Stochastic indicator involves the following signals: Stochastic lines cross indicates trend change.
Stochastic readings above 85 level currency pair is overbought,
Stochastic staying above 85 level uptrend is running strong.
Stochastic exiting 85 level downwards expect a correction down or beginning of a downtrend.
Same for readings below 75 level currency pair is oversold,
staying below 75 doentrend is running strong,
exiting upwards above 75 expect an upward correction or a beginning of an uptrend.