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A stochastic Indicator is a momentum indicator used by traders to identify the current trend using overbought zone and oversold zone. You can find this indicator at Olymp Trade in the indicator section.
What is a Stochastic Indicator?
A Stochastic Indicator is a trend indicator that oscillates between 0 to 100. where the line 50 -100 is considered a bullish zone similarly, the line 0 -50 is considered a bearish zone.
This Indicator uses the two most important lines % K and % D. The intersections points between these two lines generate buying and selling opportunities.
How to Setup Stochastic Indicator on Olymp Trade?
Login to your Olymp Trade account first. Click the indicator menu and select the Stochastic from the same.
You can also change colour and darken the line for better visibility. To edit the indicator click on the pencil icon.
How to use Stochastic Indicator at Olymp Trade
You don’t need to be an experienced trader to understand the concept of Stochastic Indicator at Olymp Trade. This concept is easy. You just need to understand the concept of overbought and oversold levels.
In case, you don’t know. when the Stochastic Indicator line % K and % D intersects above or near 80 it means that the market is at an overbought level and here you can take a sell trade.
Similarly, when the stochastic line intersects below or near line 20 it means that the market is at an oversold level and here you can take a buy trade.
Using Stochastic Indicator Divergence to trade on Olymp Trade
The last and final topic. I want to share with you is Stochastic Indicator divergence. Now, what is divergence?
Divergence is a concept that suggests that the price and indicator are moving in the opposite direction and the trend reversal is likely to happen. This usually happens when the price breaks the support/resistance level and you should be very careful at this time. The best thing you can do is not to take any risk and wait for the trend reversal.
The best way to understand and analyse any indicator is by practising and observing the movement of the same in the Olymp Trade practice account. I have shared everything about Stochastic Indicator but it’s now your turn to practice and analyse the same in the practice account. You will get $10, 000 virtual currency in the practice account which is more than enough to make you a pro player in the market.
I wish you the very best of luck!!