Stochastic is a crossover oscillator indicator while moving average is a trend indicator.
Today being Wednesday 10th the July of 2019, the EUR/NZD market has been in a bearish trend most of the time.EUR/NZD market has managed to fall below 1.6913. The question is will this bearish trend continue or will the EUR/NZD market reverse and become a bullish trend.This is indicated from the candlesticks chart below; From the candlesticks chart above, there is point A which represents the crossover between stochastic and signal line and point B located along the moving average. Although the EUR/NZD market has been in a bearish trend most of the time and we don't know whether the EUR/NZD market will continue to be in this bearish condition or it will reverse and become a bullish trend, we can use the concept of Stochastic and moving average to predict the direction of the EUR/NZD market for the remaining time.Using the concept of Stochastic, the market is normally considered to be overbought if the stochastic crosses below the signal line at above 80 and oversold if the Stochastic crosses above the signal line at below 20. At point A, the stochastic has crossed above the signal line at below 20 thus an indication of an oversold EUR/NZD market condition.Although the EUR/NZD market has been bearish today and managed to fall below 1.6913, we can decide to follow the concept of Stochastic and open a buy position because crossover at below 20, that is an indication of an oversold market condition thus the EUR/NZD market will reverse and start an upward trend. Using the concept of moving average ,the market is considered to experience a reversal trend if the price rises above the highest high of a moving average or falls below the lowest low of a moving average.At point B, the price has fallen below the lowest low of a moving average thus an upward reversal trend has started to take place. Although today the EUR/NZD market has been in a bearish trend and managed to fall below 1.6913, We can decide to follow the concept of moving average because the price has fallen below the lowest low of a moving average and open a buy position. Here is how our trading idea for EUR/NZD buy market looks like today; BUY 1.6913 T/P 1.6963 S/L 1.6863 Make sure to apply risk management while opening your position because this is not an investment advice but just a trading idea