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About Stochastic Oscillator
A stochastic Oscillator or you can call it a Stochastic Indicator is a popular trend indicator helpful in predicting the upcoming trend and reversals. It is a momentum indicator that helps to predict the upcoming trend using overbought and oversold zones. This indicator was developed by George Lane in 1950. His main motive was to help traders find an upcoming trend with high accuracy.
- A stochastic Indicator is an oscillator indicator as it oscillates between 0 to 100.
- You can easily identify the trend using overbought and oversold levels.
- This indicator measures the momentum of the price movements. The momentum is the rate of acceleration in the price movement.
- Traders normally use the combination of Stochastic indicators and RSI to get better signals.
How to set Stochastic Oscillator on Binomo Trading platform
Your first job is to log in to your Binomo trading account. and click on the indicator button next, search Stochastic Oscillator on the menu and select the name.
You can change the colour of the indicator also the time based on your experience.
Know the lines in Stochastic Indicator
There are basically two lines on the Stochastic Indicator. % K line (Yellow line ) and % D (Redline). Here, %K is a fast line which reacts much faster to price changes whereas %D line is a slow line which reacts slower to price changes. when these two-line intersect each other it creates buy and sell signals.
How to trade with Stochastic Indicator on the Binomo trading platform
When trading with Stochastic Indicator you need to focus on the intersection of % K and %D lines.
When the %K and %D lines intersect each other near line 20 or an oversold zone. It is a signal of an upcoming bullish trend and here, we can place a buy trade.
Similarly, when the % K and % D lines intersect above the 80 zone. It is a signal of an upcoming bearish trend and here we can place a sell trade.
So, I have done my job this is how you should trade with Stochastic Oscillator. The best thing you can do is try this trading indicator on the Binomo demo account and once you have practised enough you can later shift to Binomo real account. Till then I wish you the very best of luck!!