Basics of Using Stochastic Oscillator in Binary Trading

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This silent video gives a quick overview of the Stochastic Oscillator.  While the educator is actually using it to do some Forex trading, and not Binary trading, he is still giving a basic working understanding of how Stochastics can be used.  I have found that when using the Stoch for Binary Options it is more useful to use a 8-3-3 setting, rather than the default 14-3-3 setting, because your are generally trading in much shorter time frames with Binary Options.

I personally like to set up my chart with the Stochastics Oscillator and Volume Indicator in the bottom pane of my chart .  The 2 visually work beautifully together, as you can watch the volume pushing the Stoch (especially when tracking stocks and indices, currency pairs tend to show less volume).

When using Stochastics, always remember that the reading only goes to 100. So just because the %D & %K start moving flat across the top, that certainly doesn’t mean that the trend isn’t still going up.  That’s why you should always also have a Moving Average Indicator running on your main/top chart on top of the price action candles.

The Stochastic Oscillator measures the change between the current price and the previous price in order to evaluate the potential for the continuation of the current trend. The Stochastic Oscillator plots two lines on the Stochastic scale and it is the crossing of these two lines that generates “signals” that can guide your overall strategy.



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