Yesterday we looked at a 4-hour chart of the GBP/USD with an RSI (10) plotted on the chart in an attempt to find our sell signal. The daily trend is down and we see a move up off the lows to a resistance level.
That is a classic selling opportunity. Today we look at the same chart with Slow Stochastics (15,5,5) showing a potential sell. The idea with the Slow Stochastics is to wait for the crossover above 80 before selling. We still have to wait for this candle to close before confirming the crossover. That will close at 4PM Eastern today, so at that time, there may be traders who open a new sell position if the crossover is confirmed. The protective buy stop should go above the high and the profit target should be twice the risk. While past performance is no guarantee of future results, that last two times this happened turned out to be good selling opportunities. I have circle those two points on the chart below.