Forex Analysis part 5
% K and% D Crossing
In addition to the 20/80 area as in the example above, the% D and% K intersections can also be used to define a Buy / Sell position. There are times when we run out of patience waiting for Stochastic to touch the 20/80 limit as we have determined. Although often accurate but in the wave of motion is not necessarily when Stochastic move down then he had entered the area of 20 and likewise when he rose. Sometimes before it could pass through the area the price has moved back in the opposite direction so we miss the chance. Well, Sotchastic-style crossing we can use as a determinant of Buy / Sell in these circumstances. Just like the Moving Average indicator used by looking at crossings in two different periods, the same thing we can apply to Stochastic. The difference here is the crossing that occurs is between% K with% D which is smoother of% K. As we know earlier% D is the MA of% K which is nothing but a reflection of price changes. Thus, in accordance with the nature of the MA in determining trend changes, any intersection between% D and% K means a change of trend for a short period ahead. Bullish condition occurs when the% K line cuts% D from below and otherwise Bearish trend is obtained when% K is cut from above. This can happen even when both lines are in the overbought / oversold region. If this happens, it means that the pressure to buy or sell is very strong so that there will be possible price penetrate the support and ressistance. Notice when% K and% D intersect and start moving upwards (marked in yellow) the price also shows uptrend and keeps moving up. Conversely, when prices move down,% K and% D also intersect each other and show downward direction (marked in green). Both of these conditions repeatedly and alternately. The reading mode is exactly as we interpret the Moving Average indicator. Well, here is the discussion about Stochastic Oscillator. Before we move on to other indicators, I need to remind you again about the character of the oscillator indicator like this stochastic. The thing that is both advantages as well as the shortage of indicators that move within a certain range like this is its sensitivity. So also on Stochastic that can be very sensitive when we use an inappropriate period. The use of incorrect periods can lead us to the wrong decision making that ultimately leads us to big losses. For that it is highly recommended that you look for the best period on this indicator for each pairs. The amount can vary. The longer the period used then the indicator graph will be smoother which means that the sensitivity will be reduced. It is also recommended to use Full Stochastic in use because it is more subtle and can reduce the indicator graph is too curly.
Ni Stochastic image
Parabolic SAR
Parabolic SAR
In 1978 In his book "New Concepts in Technical Trading", J Welles Wilder introduced Parabolic SAR (commonly abbreviated with SAR only) along with RSI as one of the leading indicators of trading. SAR itself is short for Stop And Reverse which is more or less interpreted as a determinant indicator of Stop Loss point in trading.
In its development in the future, Parabolic SAR becomes one of the effective indicators in determining the condition of a trendy market (trending market) along with a facility called Trailing Distance which is widely provided on various forex trading platforms.
In addition to the 20/80 area as in the example above, the% D and% K intersections can also be used to define a Buy / Sell position. There are times when we run out of patience waiting for Stochastic to touch the 20/80 limit as we have determined. Although often accurate but in the wave of motion is not necessarily when Stochastic move down then he had entered the area of 20 and likewise when he rose. Sometimes before it could pass through the area the price has moved back in the opposite direction so we miss the chance. Well, Sotchastic-style crossing we can use as a determinant of Buy / Sell in these circumstances. Just like the Moving Average indicator used by looking at crossings in two different periods, the same thing we can apply to Stochastic. The difference here is the crossing that occurs is between% K with% D which is smoother of% K. As we know earlier% D is the MA of% K which is nothing but a reflection of price changes. Thus, in accordance with the nature of the MA in determining trend changes, any intersection between% D and% K means a change of trend for a short period ahead. Bullish condition occurs when the% K line cuts% D from below and otherwise Bearish trend is obtained when% K is cut from above. This can happen even when both lines are in the overbought / oversold region. If this happens, it means that the pressure to buy or sell is very strong so that there will be possible price penetrate the support and ressistance. Notice when% K and% D intersect and start moving upwards (marked in yellow) the price also shows uptrend and keeps moving up. Conversely, when prices move down,% K and% D also intersect each other and show downward direction (marked in green). Both of these conditions repeatedly and alternately. The reading mode is exactly as we interpret the Moving Average indicator. Well, here is the discussion about Stochastic Oscillator. Before we move on to other indicators, I need to remind you again about the character of the oscillator indicator like this stochastic. The thing that is both advantages as well as the shortage of indicators that move within a certain range like this is its sensitivity. So also on Stochastic that can be very sensitive when we use an inappropriate period. The use of incorrect periods can lead us to the wrong decision making that ultimately leads us to big losses. For that it is highly recommended that you look for the best period on this indicator for each pairs. The amount can vary. The longer the period used then the indicator graph will be smoother which means that the sensitivity will be reduced. It is also recommended to use Full Stochastic in use because it is more subtle and can reduce the indicator graph is too curly.
Ni Stochastic image
Parabolic SAR
Parabolic SAR
In 1978 In his book "New Concepts in Technical Trading", J Welles Wilder introduced Parabolic SAR (commonly abbreviated with SAR only) along with RSI as one of the leading indicators of trading. SAR itself is short for Stop And Reverse which is more or less interpreted as a determinant indicator of Stop Loss point in trading.
In its development in the future, Parabolic SAR becomes one of the effective indicators in determining the condition of a trendy market (trending market) along with a facility called Trailing Distance which is widely provided on various forex trading platforms.
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