Stochastic Settings

In the method section of the stochastic oscillator, what is the difference between all the settings, and does anyone know any trend reversal strategies that involve the stochastic oscillator?

Also, what are the best settings for day trading and scalping?

I currently use 14,3,3 with low/high

I’ve seen settings of 20,3,3 used successfully for intraday, just in conjunction with Heikin Ashi candles and no other indicators.

I think that’s quite a well known and good combination.

Even though I’m an optimist and nothing is ever impossible, I don’t think anyone will find a way to use stochastic to scalp forex profitably: people make claims of that kind only if they’re trying to sell something.

Possibly this could also help you: Stochastic Oscillator: Ultimate Guide & Best Settings | LiteFinance


Why can’t you scalp with it?

Also, what is a heikan-ashi

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I still don’t understand why you can’t scalp with the stochastic

So basically, scalping is bad because your broker doesn’t like it?

The Stochastic Oscillator is just an indicator; a different view of price. All of it’s formula is derived from the closing prices of the look-back period.
Because it is a derivative of price, it won’t have any ‘best’ settings, one setting won’t produce any better results than any other. A great waste of time is curve-fitting indicators… when they’re just a derivative.

You can use the same Stoc settings, just changing the timeframe. Example: Stoc 14,3,3 looks back 14 periods. That’s last 14 minutes on a 1min chart, or past 14 hours on a 1HR chart.

Since it’s a calculation of recent closing prices, once you know the formula, you should be able to know where the Stoc Osc is at by looking at a plain chart, no matter what settings (20,4,4) (14,3,3)


Oh, interesting
So basically, I should be able to still be able to trade even though there are no indicators on the chart
That will probably take a long time before I am at that level

Thank You Wise Sage

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I learned something else:
If you’re going to use indicators, use indicators that conform to the behaviour of that market.
A strategy that works really well for a major currency pair probably won’t work on an exotic pair since they don’t behave the same so if you want to switch pairs, either tweak it or dump the strategy
i shall remember this encounter for the rest of my trading career :upside_down_face:

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