The software that traders use on online trading platforms is more user-friendly than it was a few years ago. This is one of the reasons for the growing interest in online forex trading. Traders prefer EURUSD, USDJYP and GPBUSD.
My focus in this article is on how to use bowling bands and stochastic oscillators as a trading strategy. The bowling band index is defined first and then the stochastic oscillator indicator. The latter explains how the two indicators act as a buy and sell signal.
Bowling band A currency graph consists of three lines. The first line is the moving average line. The second is the high standard deviation and the third is the low standard deviation. 95% of the closing price is in the bowling band. The preferred moving average is 21-times.
Selling and buying signals when the price of a currency exceeds a high value deviation and a low value deviation.
Stochastic oscillator Stochastic is also called a momentum indicator. A momentum indicator is an indicator that calculates the value of a change in price over a period of time.
The Stochastic was built by George Lane in the 1950s. The theory is that prices are going up and down like a wave. The waves bought an excess and moved into an oversold layer. The range is 100 percent and the buy level is 80 percent and the over-selling level is 20 percent. The market is considered bullish when there is a wave above the 50 percent level and the market is considered bearish when the price is below the 50 percent level. Bullish is when the market continues to grow. Bearish is when the market is on the decline.
The indicator consists of two lines. The stochastic line is represented as% K. % K is calculated as the current close minus minimum. The result is divided by the highest high minus the minimum low and multiplied by 100. The second line is The signal line is represented as% D. % D is a simple moving average of% K.
Stochastic develops as a slow indicator and a fast indicator. The difference is that the fast indicator is steeper than the slower one.
How to trade with trading strategies? When traders choose to trade with this strategy they are looking for a specific indication Purchase situation.
The indicators are:
1. The price line is outside the lower standard deviation.
2. Candle sticks are red and traders are looking for the first green candle sticks.
3. The market is in over-selling areas.
4. The buying situation is when the candle sticks turn green.
A. Sales situation The index is
1. Beyond the value deviation above the price line.
2. Candle sticks are green and traders are looking for the first red candle sticks.
3. Markets are in over-purchased areas.
4. The selling situation is when the candle sticks turn red.
This article shows a trading strategy based on bowling bands and stochastic indicators. The technique is easy to use and can be used by day traders who want to make small trades like 10 or 30 minute trades.