Stochastic Oscillator

The Stochastic Oscillator measures where the close is in relation to the recent trading range. The values range from zero to 100. %D values over 75 indicate an overbought condition; values under 25 indicate an oversold condition. When the Fast %D crosses above the Slow %D, it is a buy signal; when it crosses below, it is a sell signal. The Raw %K is generally considered too erratic to use for crossover signals.

The Stochastic Indicator was developed by George C. Lane.

Terminology:
Fast Stochastic  Refers to both %K and %D where %K is un-smoothed
Slow Stochastic  Refers to both %K and %D where %K is smoothed
Raw %KUn-smoothed %K
Fast %KUn-smoothed %K
Slow %KSmoothed %K
Fast %DMoving average of an un-smoothed %K
Slow %DMoving average of a smoothed %K, in effect: a double smoothed %K
%DAlways refers to a smoothed %K (whether or not the %K itself is smoothed)

Formula:




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