Stochastic Oscillator

Stochastic Oscillator

The Stochastic Oscillator is a technical analysis indicator that measures the position of the closing price of an asset relative to its price range over a specific period. It is used to identify overbought and oversold conditions, providing signals of possible trend reversals or confirmations of existing trends.

The stochastic oscillator is a momentum indicator, developed by George Lane, that compares the current closing price with the highs and lows of a given number of periods. It is measured in percent. The stochastic oscillator is represented by two lines:

  • K Line: The main line of the indicator
  • D Line: A moving average of the K line

Using Settings

Clicking on the indicator settings icon will open its configuration window, within which you will be able to make several choices regarding the functionality of the indicator itself.

Parameters

In the Parameters section you can configure the stochastic calculation:

General


Set the periods of K and D lines:

  • K Period: The number of periods for the K line calculation (default: 14)
  • D Period: The number of periods for the D line moving average (default: 3)
  • Smoothing Length: Additional smoothing applied to K line (default: 3)

Level Settings


Configure the overbought and oversold thresholds:

  • Overbought Level: Level indicating overbought condition (default: 80)
  • Oversold Level: Level indicating oversold condition (default: 20)
  • Overbought Color: Color for the overbought threshold line
  • Oversold Color: Color for the oversold threshold line
  • Level Width: Define the width of the threshold lines

Subgraphs


In the Subgraph section you can change the colors and style of K and D lines:

  • K Line Color: Set the color of the K line
  • D Line Color: Set the color of the D line
  • Secondary Color: Set an optional secondary color
  • Subgraph Style: Choose the display style 
  • Line Style: Define the line style
  • Line Width: Define the width of the indicator lines
  • Use Secondary Axis: Option to display on a secondary axis

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