Stochastic Forex Indicator Crossover Signals
One way to interpret the forex trading signals provided by the Stochastic Oscillator forex indicator is similar to a moving average crossover forex trading strategy. In the Stochastic oscillator forex indicator, a crossover forex signal happens when the %K and %D lines crossover. These crossover forex signals should be taken with scrutiny as, out of the forex stochastics oscillator trading signal interpretations discussed so far, they produce the most forex trading whipsaws. Whipsaws or False forex trading signals are especially common in the Fast Stochastic Oscillator Forex Indicator version.
Stochastic Oscillator Crossover Forex Trading Signals:
- For a Sell forex signal, a forex trader looks for the %K line to move below the %D line.
- For a Buy forex signal, a forex trader looks for the %K line to move above the %D line.
Since stochastic crossovers forex trading signals of %K and %D are often unreliable, they should be verified with other forex technical indicators.
The Stochastic Oscillator Forex Indicator Center-line
The stochastic oscillator center-line lies at the 50% level in the stochastic forex indicator panel. It implies that there is a balance between bulls and bears. Situations when the stochastic forex indicator crosses the center-line can give an insight into whether the buyers or sellers will begin to control the forex market trend.
Stochastic Oscillator Center-line Forex Trading Crossovers Signals
- If the Stochastic oscillator forex indicator is staying below the center-mark (between 40%-50%) and crosses up, then it is an indication that the forex bulls are taking control of the forex market.
- If the Stochastic oscillator forex indicator is staying above the center-mark (around 50%-60%) and then crosses below the center-mark, it can be an indication that the forex bears have taken control of the forex market.