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TECHNICAL ANALYSIS MASTERY | DAY 13 | INDICATORS
STOCHASTIC
Momentum Oscillator
Compares closing price to price range over time.
Find overbought and oversold conditions with precision.
HOW STOCHASTIC WORKS:
Two lines measuring momentum on a scale of 0 to 100.
%K LINE (Fast Stochastic)
The main line. Compares current close to recent price range. More sensitive and faster to react.
%D LINE (Signal Line)
3 period moving average of %K. Smoother and slower. Used for crossover signals.
STOCHASTIC ZONES:
➔ Above 80 = Overbought Zone
➔ 20 to 80 = Neutral Zone
➔ Below 20 = Oversold Zone
Default Settings: 14, 3, 3 (Period, %K Smoothing, %D Period)
STOCHASTIC TRADING SIGNALS:
BULLISH CROSSOVER
➔ %K crosses above %D in oversold zone
➔ Both lines below 20 then turn up
➔ Strongest when in clear uptrend...




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