Fxbasic

The Stochastic oscillator is another technical indicator that helps traders determine where a trend might be ending.

The oscillator works on the following theory:

During an uptrend, prices will remain equal to or above the previous closing price. During a downtrend, prices will likely remain equal to or below the previous closing price.

This simple momentum oscillator was created by George Lane in the late 1950s.

One indicator that can help us determine where a trend might be ending is the Parabolic SAR (Stop And Reversal).

A Parabolic SAR places dots, or points, on a chart that indicates potential reversals in price movement.
From the image above, you can see that the dots shift from being below the candles during the uptrend to above the candles when the trend reverses into a downtrend.

How to Trade Using Parabolic SAR

The nice thing about the Parabolic SAR is that it is really simple to use. We mean REALLY simple.

Basically, when the dots are below the candles, it is a BUY signal.

When the dots are above the candles, it is a SELL signal.

The various types of indicators

* Bollinger Band
* Moving Average
* MACD
* Parabolic Sar
* Stochastic
* RSI ( Relative Strength Index )