Nabil, regarding your friend, my belief is that he should learn as much as possible, both from the school here and studying various methods. But he shouldn’t put off trading on demo for too long, as you can’t learn to trade unless you actually start trading Neither should he be too quick to jump from demo to live trading - the more time spent in demo, the better a trader you’ll be when you switch to live & the less chance of it being a disaster.
The Stochastic, in my method, is overbought when the lines are all concentrated together above 80, and oversold when concentrated below 20. The tighter the concentration the better. In terms of how you should react … sometimes an overbought/sold will happen right at the point where a trend reverses or starts to retrace. Sometimes the trend will slow down a bit, crunch sideways a while, then keep going. Sometimes it’ll keep going just a little longer and then reverse.
Its a warning sign, if you’re trading with that trend, to either take profit or move your stops up close, to take you out if it does start reversing. It is not a reversal indicator - never enter contrary to the trend just because the stochastic says overbought or oversold.
The Training Wheels method does give you clear rules to follow, which is what I needed, while also requiring that you analyse the price action in the context of the indicators - over time & experience that will make you (and me) a better trader. It doesn’t guarantee safety though, you’ll take losses from time to time with this method the same as you will with others. How well you manage those losses, both in terms of protecting your capital, how disciplined you are with stops, and how it affects you psychologically and emotionally - that’s what will determine how good a trader you’ll become.