This is a simple approach to an advanced concept, divergence. Stochastic is my favorite tool, divergence one of my favorite signals. It can tell you when a rally is about to end, a bear market is about to reverse, and when pull backs, corrections and relief rallies have run their course.... basically, a lot of great non-trend following signals. This strategy is not one you will use all the time, most likely, but it is a good extension for anyone who already uses stochastic, or any oscillator for that matter, and will enhance your trend following success as well as provide additional opportunities to profit.

The Geek's Simple Stochastic Divergence Strategy