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How Stochastics Oscillator Technical Works

The Stochastic oscillator uses periods for fast and slow lines. %K and %D depend on the trader's goal with this forex tool.

  • A trader using the Stochastic oscillator indicator in combination with a trend indicator to see overbought & oversold levels, one can use periods 10 periods.
  • The default period used by the stochastics technical indicator is 12.

Forex traders should temper their decision-making by avoiding sole reliance on the stochastic indicator: instead, it should be used in conjunction with other supplementary technical indicators.

In ranging markets this Stochastic oscillator technical technical indicator can be used to illustrate oversold/overbought levels as potential profit booking points when trading the market.

Oversold & over-bought levels by default are 20 and 80, but other traders use 30 and 70.

To look for 'overbought' region at the indicator's 80% stochastic forex oscillator mark is used

To look for 'oversold' region 20% stochastic forex oscillator mark is use.

The overbought and oversold areas are shown as dotted lines on the stochastic oscillator trading indicator. These areas can also be changed to the 30 and 70 levels.

Overbought and Over-sold Levels in Stochastic Oscillator

Overbought and Over-sold Levels on Stochastic Indicator

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