Lesson 17: The Stochastic Indicator

Stochastic is an indicator of the most popular these days, it has appeared in the financial markets in the 50s through Georges Lane and is widely used on any type of market: stocks, futures, cfd, forex etc. .

The stochastic is thus composed of two curves and two terminals (80 and 20). The red curve is only a simple moving average serving as a signal curve, it is called the% D. The blue curve represents the essential calculation of the indicator. It is called the% K.

It will therefore be necessary to focus on two factors:

* Crosses between lines% D and% R 
* Overbought and on sale passes

How to spot stochastic trading signals?

Buyer signal: When the% K line passes over the% D line in the BUSINESS ZONE Vendor
signal: When the% K line falls below the% D line in the SURCHARGE AREA

Examples of stochastic signals (click to enlarge)