I bet you have heard or even use a stochastic indicator before? Stochastic indicator divides into two types of timeframe. One is the slow stochastic, the other is fast stochastic. Both settings have their own advantages when use correctly. It is better to learn about your own trading strategy before you are using this indicator in your live trading account.
What stochastic really is? How is it differs from the other indicators available out there? Stochastic indicator is an oscillator indicator that able to notify the trader when the market is in oversold or overbought condition. Pure stochastic trader using the crossover of the %K and %D that spotted at both of oversold and overbought area as entry signal to make an entry order.
We can spot obvious difference between the fast stochastic and the slow stochastic. One of them is by looking at the numbers of crossovers that happen at the indicator. With fast stochastic, the numbers of line crossovers can be found more often if compare to the slow one. But most of the time, the crossovers giving false signals because of the many of them that happen.
For day trader, medium-term trader, and long-term trader, the slow stochastic are giving them signals that are more obvious during trading. So, it is no wonder if we are seeing these types of traders only use slow stochastic during their trading time. While the scalpers, they prefer to use fast stochastic more because most of these traders are using very small timeframe from one minute up to a tick timeframe.
Should you be interested of using stochastic indicator in your trading activity, I suggest that you first decide what kind of trader are you? Are you a day trader, medium-trend trader or long-term trader? If you position yourself among these types of traders, then the best stochastic setting you want to use is the slow one. However, if you are a scalper where you only take very small amount of profit, and do lots of trading in one day, the fast stochastic would be the perfect choice for you to use.
What stochastic really is? How is it differs from the other indicators available out there? Stochastic indicator is an oscillator indicator that able to notify the trader when the market is in oversold or overbought condition. Pure stochastic trader using the crossover of the %K and %D that spotted at both of oversold and overbought area as entry signal to make an entry order.
We can spot obvious difference between the fast stochastic and the slow stochastic. One of them is by looking at the numbers of crossovers that happen at the indicator. With fast stochastic, the numbers of line crossovers can be found more often if compare to the slow one. But most of the time, the crossovers giving false signals because of the many of them that happen.
For day trader, medium-term trader, and long-term trader, the slow stochastic are giving them signals that are more obvious during trading. So, it is no wonder if we are seeing these types of traders only use slow stochastic during their trading time. While the scalpers, they prefer to use fast stochastic more because most of these traders are using very small timeframe from one minute up to a tick timeframe.
Should you be interested of using stochastic indicator in your trading activity, I suggest that you first decide what kind of trader are you? Are you a day trader, medium-trend trader or long-term trader? If you position yourself among these types of traders, then the best stochastic setting you want to use is the slow one. However, if you are a scalper where you only take very small amount of profit, and do lots of trading in one day, the fast stochastic would be the perfect choice for you to use.
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