Many people say Stochastic Oscillator as Stoch and you know that it is the trading momentum indicator that will follow the speed of the current trading momentum. Of course, this kind of indicator is used often to determine the oversold and overbought states in the Forex trading or Crypto trading. Not all people can use this tool and if you are professional, you can conduct the Stochastic Oscillator settings for 1 hour chart. Many people say that this is the killer move to be successful in trading.
What to Know Before Making Stochastic Oscillator Settings for 1 Hour Chart?
Before making Stochastic Oscillator settings for 1 hour chart, you need to understand about this tool so you know what to do and what to avoid. When it comes to the oscillator, the Stoch will fluctuate between zero and 100. If the value is under 20, then it is oversold. However, when the value is over 80, it is called overbought. The idea behind it is so simple to understand. This might work directly under the premise that will change in the momentum which precedes the price changes and also the trends.
You can take the analogy of the car. You need to imagine that you drive the car performing a U-Turn. Before U-Turn can take place, you need to slow down the car. You can imagine that U-turn is the trend reversal while slow down is the momentum change. The momentum change can be integrated to the trading strategy to know the reversal points in the market. Once you understand about it, you can implement this tool to the trading strategy you want and what you need to do is finding the divergences between stoch and price.
The divergence between them and other market indicator can signal the reversal trend imminent in the future. In summary, the Stochastic Oscillator settings for 1 hour chart will help you to find the hidden weakness and strength of the price action by identifying the oversold and overbought conditions in the market.