Double Stochastic indicator is based on the original Stochastic oscillator which is used to identify the oversold and overbought zones-levels. Prices move under the effect of a trend which is an outcome of the battle between the sellers and the buyers. After a certain time forex investors think that the currency pair is overvalued or undervalued. During these times, we see corrections. These counter movements or reversals are a part of trading and necessary.
Double Smoothed Stochastic oscillator helps forex traders to visualize overbought/oversold levels and the price behavior expectations.
How to Trade With Double Smoothed Stochastic:
Buy Signal: Wait for MACD bar to climb above the 20 level.
Sell Signal: Wait for MACD bar to drop below the 80 level.