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3 basic EMA line algorithms in IQ Option

What is an RSI indicator? Use RSI to maximize return on investment (P1)

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Technical Bollinger Band Indexes In IQ Option

Factors needed to become successful investors!

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Basic knowledge about making money online with Binary Option (IQ Option)

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“Risk Warning: Binary options trading may not be suitable for everyone, so please ensure that you fully understand the risks involved”

The Stochastic Oscillator (SO) is a type of momentum indicator that helps determine overbought and oversold positions. In other words, this indicator provides information on when traders should join or leave the market. This indicator is also used to predict the future performance of the underlying asset. It was created and introduced by George C. Lane in the 1950s.

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The Stochastic Oscillator as expressed in the IQ Option trading platform

How does the SO indicator work?

You are familiar with the types of indicators introduced in previous articles such as SAR Indicator, AO Indicator … It is based on the trend of prices in previous periods to predict the increase or decrease of level price in the future.

However, the SO indicator that we introduce below operates in a different way. “This indicator,” Lane said, “is not based on price, nor on quantity or anything – it is based on speed – or else the DA is rising / falling. In principle, “DA” changes before price changes.

In a nutshell, the SO indicator is based on the steady, gradual or slowdown of prices to predict a reversal of price trends – which is extremely important in the success of business transactions. on the foreign exchange market.

How the SO indicator works

The Stochastic Oscillator will give you the calculation of the ratio between the previous session’s closing price and the low-price range for a certain period of time-based on the trend if the trend is up, the level The price will be higher than the closing price of the previous period, and vice versa, in the downtrend, the price will be lower than the closing price of the previous period.

The SO graph consists of two horizontal lines and two moving averages MA, which are called fast and slow lines. The default moving average MA is 3 phases, while the moving average MA moves slowly with a period of 13. The oscillation range is from 0 to 100, with two overbought levels and over 20 defaults. % and 80% – these two levels coincide with two horizontal lines.

When both moving and slow moving averages stay above 80%, the asset will be considered “overbought.” Conversely, when both lines are below the 20% line, the asset will be considered “over sold”. However, many times the signals indicate that the assets are in “over-selling” status, but stock prices will not necessarily increase. Similarly, when there is “over buy”, it does not mean that you must always try to put a foot in order to place an investment order. Stock prices may still be overbought for a long time, and stocks are still gaining. Any technical analysis business model is only relatively accurate, and this is quite possible.

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In the uptrend, the SO indicator may still be in “overbought” state for a long time

How to Set Up IQ Index in Base Option

First, click the “Indicators” button in the bottom left corner of the screen. Then select “Stochastic Oscillator” from the list of suggested indicators.

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Set indicator. Step one

Go to the “Setup and Apply” tab, and if you want to use the indicator with standard preset parameters, just click the “Apply” button.

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Set instruction. Step two

Or, you can adjust the parameters of the indicator according to your preference, change the% K and% D in Period, as well as the “over buy” and “over” levels for higher accuracy (or get more signal).

An indicator chart will appear at the bottom of the screen, just below the price chart.

Use of Transaction Indicator

Again, the main purpose of this indicator is to indicate the “overbought” and “overbought” level of the asset series that the investor is holding, indicating the time when the price trend starts to change. Modified before trending business models can be detected. It then offers a hint for traders to have a high profitability period.

“Overought and Oversold Levels”

Overbought Indication

As both the fast moving and the slow moving MAs are above the overbought level, this trend is expected to reverse and become bearish. The bearish signal will be clear if the moving average MA moves above the MA moving line slowly.

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The reversal of the SO line is indicative of a bearish start

Oversold Indicator

Similarly, when both moving averages move quickly and slowly below the oversold trend, the trend may be bullish. When the MA is over the slow moving MA, this is a sign of the uptrend.

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The reversal of the SO line is a sign of the upward trend

 

Subjection

When the price movement and price movement begin to move in different directions, it can be viewed as a signal that the trend is reversing. Divergence can also be a sign of rising prices and falling stock prices.

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CONCLUDE

The SO – Stochastic Oscillator is a very interesting and useful business analysis model. For the most effective, as always, you should combine the momentum indicators and other trend indicators to get more accurate predictions in your trading.

After reading this article you do not have a IQ Option account, please click on the registration button below to create your account right now.

“Risk Warning: Binary options trading may not be suitable for everyone, so please ensure that you fully understand the risks involved”

Or you can simply register by filling in your information below and email to confirm your account!

Wish you happy and successful transactions!

 

 

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