D) TRADING TIPS
It is important to remember that the scale of the stochastics ranges from 0 to 100. As the %K line reaches the extremes of the scale, it should not be interpreted to mean that the currency will necessarily reverse in the immediate period. The currency will indeed reverse, but it may do so at any time between the next day and the next several days (in a case of a daily chart). This is important to remember, since most traders have loss-limit constraints that may
inadvertently be triggered in the very short run. The correct price reaction, even a day later, may offer little comfort and sympathy.
D) TRADING TIPS
It is important to remember that the scale of the stochastics ranges from 0 to 100. As the %K line reaches the extremes of the scale, it should not be interpreted to mean that the currency will necessarily reverse in the immediate period. The currency will indeed reverse, but it may do so at any time between the next day and the next several days (in a case of a daily chart). This is important to remember, since most traders have loss-limit constraints that may
inadvertently be triggered in the very short run. The correct price reaction, even a day later, may offer little comfort and sympathy.