How Stochastic Gold Indicator Works
The Stochastic oscillator indicator uses time periods to calculate the fast & slow lines. The number of time periods used to calculate the %K & %D line depends on what purpose a gold trader is using the Stochastic oscillator for.
- A trader using the Stochastic oscillator indicator in combination with a trend indicator to see overbought & oversold levels, one can use periods 10 periods.
- The default price period used by stochastics gold oscillator indicator is 12.
Traders should not use stochastic gold indicator alone for making gold trading decisions, but should use this Stochastic indicator in combination together with other indicators.
In ranging markets this Stochastic oscillator indicator can be used to show oversold/overbought areas as potential profit taking points when trading the trading market.
Over-sold & over-bought gold trading levels by default are 20 and 80, but other traders use 30 & 70.
To look for 'overbought' region at the indicator's 80% stochastic gold trading oscillator mark is used
To look for 'oversold' region 20% stochastic gold trading oscillator mark is use.
The overbought & oversold levels are displayed as dotted horizontal lines on the stochastic oscillator indicator. These levels can also be adjusted to the 30 & 70 levels.
Overbought & Oversold Levels on Stochastic Indicator
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