Technical Analysis of Stochastic Oscillator Trading Indicator

A lot of xauusd information can be gathered from the shapes and duration of the market tops and bottoms of the stochastic oscillator technical indicator.

The amount of time that the instrument stays overbought or oversold is an important factor when analyzing the strength of the market trends.

Gold Market Tops

Narrow market top that does not reach very high above 80 %

Narrow market tops means that the bulls are weak, & that the bears have overpowered the bulls quickly. This means that the bears might push the price further down without much resistance from the bulls.

Very high, wide market tops

Wide market top mean that the bulls are very powerful much more than the bears & the ensuing short term trend reversal (retracement), will be very short lived. Retracement on the stochastic oscillator technical indicator will not even reach the oversold levels before stochastic oscillator technical indicator moves back to the over bought levels.

Gold Market Bottoms

A narrow market bottom that doesn't reach very deep below 20 %

The narrow market bottom means that xauusd bears are weak in their attempt to push the price down, the bulls have gained control of the price pretty fast so the price movement upwards will continue for a while. And the upward market trend will continue for a while.

Very wide, deep market bottoms

A wide market bottom is a sign that the bears are very strong and the sellers are in control of the price, therefore any retracement upwards will not stay for long.

Study More Tutorials and Lessons:

Trade Forex Trading

Technical Analysis of Stochastic Oscillator Trading Indicator

Gold Market Tops

Gold Market Bottoms