Stochastic
Where price sits within its recent range via %K/%D lines; used for overbought/oversold and crossovers.
How to read it
Stochastic shows where the close sits within the recent high–low range, on a 0–100 scale. Above 80 is overbought, below 20 oversold. Two lines: %K (fast) and %D (a moving average of %K).
Trading signals
A %K crossing above %D inside the oversold zone (below 20) is a common long trigger; %K crossing below %D above 80 a short/exit. In a strong trend the lines can stay pinned to an extreme — confirm with a higher-timeframe filter.
Divergence
Price/stochastic divergence — price a lower low while the oscillator makes a higher low — flags a possible bottom (mirror for tops).
Parameters
K Period is the high–low lookback; Smooth K and Smooth D smooth the two lines. Longer values give smoother, fewer but cleaner crossings.
- Stochastic K Period
- Lookback for the %K line.
- Stochastic Smooth K
- Smoothing length for the %K line.
- Stochastic Smooth D
- Smoothing length for the %D line.