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Stochastic oscillator: what is it and how do you use it?
The stochastic oscillator is a momentum indicator which compares the closing price of an instrument to the range of its price over a certain period of time. It is a two-line indicator that can be applied to any chart, and it has a range value from 0 to 100. It is used to generate trading signals, determine possible trading opportunities such as overbought and oversold conditions, or forecast entry and exit points. The usual timeframe for the stochastic oscillator is 14 time periods (hourly, daily, etc.). A reading of 0 represents the lowest point of the given trading range, while a reading of 100 indicates the ... (full story)