Stochastic Oscillator Indicator: What Do You Need to Know?

There are various indicators in MT4 that can help in our trading all day. Before going any further, it's nice to know first the type of indicator. Indicators can be divided into two leading indicators and lagging indicators. Leading indicator is an indicator that gives a signal or signal before a trend or reversal occurs. Lagging Indicator also gives signals or signals after the trend or reversal occurs.

Stochastic Oscillator Indicator

Stochastic Oscillator is a momentum indicator that provides a comparison of the closing price of a price with various prices according to a certain period of time or time rate. The sensitivity rate of the Stochastic Oscillator indicator can be set according to the user's will. Stochastic Oscillator indicator can be used to determine the number of sales, especially buying, divergence, and buying or selling signals in trading.

There is a special formula used to calculate the Stochastic Oscillator but this article just wants to give a little general exposure regarding the Stochastic Oscillator indicator only. With a good understanding of stochastic oscillator whatever configuration (setting) coupled with good risk control can provide good benefits to its users.

The Stochastic Oscillator was developed by George Lane (1921-2004) in the late 1950s. He is a security trader, author, educator, speaker, and technical analyst. He is also one of the front commercial traders in Chicago. Lane's popular words are “Stochactics measure price momentum. If you imagine a rocket being up in the air, before the rocket drops down, it must slow down momentum before it falls down. Momentum is always changing before prices change”

How to use the Stochastic Oscillator？ Look for a teacher who can teach you the use of Stochastic Oscillator indicators or you can read through the websites available today. Whatever settings you use, as long as it benefits you, use it with proper risk management.

“Trade wisely, sometimes no position in trading is also a position”