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I Sold and Now the Slow Stochastics is Moving Up....Should I Get Out?

I Sold and Now the Slow Stochastics is Moving Up....Should I Get Out?

Thomas Long, Course Instructor

They may have sold on a crossover of the Slow Stochastics, but now that indicator is oversold (below 20) and starting to move up, so they want to know if they should get out of the trade.  Of course, I will ask them if they had first identified their risk and placed their protective stop in the market.  If they have, then I try to remind them that they are trading the price of the market and not the Slow Stochastics.  Using technical indicators to time your entry is fine, but getting out of the trade early because of the Slow Stochastics may not be the best way to use these tools.  They are lagging in nature, which means they will tell you what has already happened, but they do not have the ability to predict the future.  So if you entered into the trade using a technical indicator, entered your protective stop and target to take profits, then let the trade ride.  Our profit and loss will depend on where the currency pair is when we exit the trade, not on the value of the Slow Stochastics. 

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.