Stochastic Indicators compare the closing price to its price range over a given time period. The indicator’s sensitivity to market movements can be reduced by adjusting the time period or by taking a moving average of the result. The theory behind this indicator is that in an upward-trending market, prices tend to close near their high, and during a downward-trending market, prices tend to close near their low.
This indicator is built using the Stochastic Oscillator as a foundation but adapted to show the measurements in a histogram format. This indicator re-calculates as the market fluctuates and uses the default settings of K5-D3-Slowing2. You can change these parameters to suit your trading needs.
Time Frame: H1 or higher
BUY: When Blue cross above 0 level and wait for 2nd Blue StocHastogram bar
Sell: When Red cross below 0 level and wait for 2nd Red StocHastogram bar
Like: If you follow the overbought and oversold principles then this is for you. Histogram is a refreshing way of visualizing the market.
Additional thoughts: Signal based on market fluctuations so keep this in mind when doing your trading analysis.