User Rating: 0 / 5

Star InactiveStar InactiveStar InactiveStar InactiveStar Inactive
 

Stochastic Oscillator

Utility: Evaluating the Trend

Standard Settings: 14 Periods (14,3,3)

The Stochastic Oscillator is a momentum indicator developed by George Lane. The Stochastic Oscillator can measure the momentum and the speed of a price. It can be used as a tool of identifying trend reversals or trend continuation.

 

The Stochastic bound between 0 and 100 and it can identify overbought and oversold market levels as follows:

□ Overbought market levels are set at reading 80

□ Oversold market levels are set at reading 20

 

Calculating the Stochastic Oscillator

The Stochastic is formed by two lines

■ %K = {(Last Close - Lowest Low in K period)/(Highest High in K period - Lowest Low in K period)} * 100

Where,

K is the number of periods. Standard settings K=14 (14,3,3)

 

Trading with the Stochastic Oscillator

A bullish trading signal occurs when the price of an asset forms a lower high but the stochastic forms a higher high. A bearish trading signal occurs when the price of an asset forms a higher low but the stochastic oscillator forms a lower low.

Stochastic Oscillator

 

READ MORE

■ COMPARE PROVIDERS

Forex Brokers

Trade Signals ► CFDs Brokers        
■ TREND INDICATORS Trend Indicators

» Standard Deviation

» Bollinger Bands

» Parabolic SAR

» Ichimoku

» Moving Averages » Fibonacci Trading
■ TRADING OSCILLATORS Oscillators

» Rate of Change

» RSI

» Williams %R

» Stochastic

» Gator

» Momentum

   

» MACD

» Awesome

» DeMarker

» DMS System

» CCI

» StochRSI
■ NEWS INDICATORS News Indicators

» Interest Rates

» GDP

» US NFP

» Consumer Price Index

» Retail Sales

» Trade Balance
   

» Purchasing Manufacturing Index

» Consumer Confidence Survey    

 

 

 

Stochastic Oscillator

WebForex ©