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An oscillator based on the position of the current close relative to the absolute price range over the last days. Stochastics consists of two lines: %K, which is the basic calculation, and %D, which is a moving average (typically three days) of the %K line. Usually, "stochastics" refers to an additionally smoothed version of the formula, whereby the original %D becomes the new %K line and a moving average of this line becomes the new %D line (this version is sometimes called "slow" stochastics, while the original calculation is called "fast" stochastics).
A technical indicator that functions as an overbought/oversold oscillator. It consists of 2 lines (%K & %D). Based on the premise that when price is rising, it will tend to close near the high of the day on daily charts (but can be used on charts of any time period from 1-minute & up). For an advance to stop, it must first slow down. Thus a change in the momentum of an advance occurs before price reverses. Stochastics attempts to identify this change in momentum. Also used to signal divergences. Works best in non-trending markets.
These oscillators measure overbought/oversold situations, divergence and trading signals. They are based on the following observations: in an uptrend, the closing price is usually closer to the high of the price range, whereas, in a downtrend the closing price is usually near to the low of the price range. The Stochastic uses two lines. The formulae used to determine both lines are given using a popular parameter set of 5 and 3 days. %K = 100 x (C-L5) / (H5-L5). where C= last close or latest price. L5 = lowest low during the last 5 events. H5 = highest high during the last 5 events. %D = 100 x H3/L3. %D is a three-day or event moving average of %K. where H3 = 3 day sum of (C-L5) and l3 = 3 day sum of (H5-L5). The same 75 and 25 values are used to identify overbought/oversold situations. A slower stochastic is sometimes preferred to counteract whipsawing and act as a filter. In this case the %K line is not shown. %D is displayed with a new line: %Dn = 3 day moving average of %D. The parameters to be input in this case would then be 5-3-3.
Charting method that measures security pricing behavior over a period of time. This is one of the indicators available through the Vision charts features.
An indicator that measures the price velocity of a particular stock or market index. It essentially shows where price is trading within a given range. The boundaries of the range would be the high and the low for a specific time period determined by the user. A stochastic of 100% would mean price is currently trading at the extreme high of the range and a stochastic of 0 would mean price is trading at the extreme low.
An overbought-oversold oscillator that compares the current bar to a preset selection of high and low prices. The indicator plots the results on a graph between 0 and 100.
An oscillator that measures the relative position of the closing price as compared with its range over a chosen period. It is comprised of the faster moving %K line and the slower moving %D line.