Accelerator Oscillator and Stochastic Indicator
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In this Forex Video tutorial, we will combine the Accelerator Oscillator and Stochastic Oscillator.
This strategy is especially useful if you like to enter into positions on reversals.
The stochastic oscillator gives reliable gauge of when the market is overbought or oversold… giving you good indication of when it’s time to enter the market.
When the Stochastic is above level 80, as a general rule, it just means that the market is overbought.
When the stochastic is below the 20 level, then it just means that the market is oversold.
It’s only then the market past the 80 level and comes back down to the 50 level that a sell signal is triggered.
Likewise, when the market is oversold… goes below the 20 level and come back up the 50 level, then we have a buy signal.
However, we will always need confirmation and in this tutorial, we will be seeking buy or sell confirmation from the ADX Indicator.
And we want to see that the Accelerator Oscillator is also above the Zero level when the Stochastic triggers a buy signal.
We want to see the Accelerator Oscillator below the Zero level when Stochastic triggers a sell signal.
And like all strategies covered so far, we want to respect the support and resistance level.
If we are too close to support and resistance, we will skip the trade entirely regardless if the buy or sell signal is generated.
We prefer to respect the support and resistance level because many times these are the levels the market might make a turn.
We only enter into positions when support have become resistance and resistance have turned into support.
When we trade, we want every small factor to be behind us to increase our probability of success.
And for that to happen, sometimes all it takes is just a little bit of knowledge BUT plenty of patience.
It’s better to be safe out there.
See you on the next video.
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