There are many traders still confuse about Slow Stochastic indicator. Slow stochastic indicator is consists with two Moving averages indicator moving between two level zones : 20 ( the oversold area ) and 80 ( the overbought area ) both plotted below the market chart with the red dotted lines. The trading strategy a Forex trader would use it in transaction is to first identify the direction that they want to open trading position and that will be in the direction of the market trend on the D1 Forex chart. Once that has been determined , the Foreign exchange trader can use Stochastic tehnical indicator to time their trading position in that trend direction. Assume the currency has a uptrend so we would only be searching for buying chances. The accurate signal that Stochastic technical indicator will give is after the stochastic lines have been under the 20 level (oversold area) , and the stochastic line indicator is crossed over one another, and then stochastic line indicator close above 20 , that signals that bullish momentum is in chart. The Foreign exchange trader can then open a buy position having "fine tuned" theid entry by using Stochastic technical indicator. For a sell position
it would be the same method only we would wait for stochastics indicator technical to close under 80 after trading above 80 level. on the forex chart below , you can see how the yellow box on the stochastic trading indicator match up with the yellow box on the forex candlestick chart above.
