{"id":1104,"date":"2019-08-16T10:30:06","date_gmt":"2019-08-16T07:30:06","guid":{"rendered":"http:\/\/roboforex.com/blog\/?p=1104"},"modified":"2026-05-26T10:53:18","modified_gmt":"2026-05-26T07:53:18","slug":"stochastic-oscillator-description-trading","status":"publish","type":"post","link":"https:\/\/roboforex.com/blog\/blog\/2019\/08\/16\/stochastic-oscillator-description-trading\/","title":{"rendered":"How to Use Stochastic Oscillator? Description and Trading with the Indicator"},"content":{"rendered":"\n

<\/span>Description of the Stochastic Oscillator<\/span><\/h2>\n\n\n\n

The Stochastic Oscillator<\/strong> appeared and became popular thanks to a famous trader George Lane<\/strong>. He noticed that prices, moving from one level to another, sometimes create overbought and oversold<\/a> areas; Lane automatized the process of finding these areas with the help of an indicator. The Stochastic is an oscillator demonstrating the position of the current price in % in relation to the previous price range.<\/a><\/p>\n\n\n\n

The Stochastic Oscillator chart is drawn in a separate window under the price chart and consists of two lines: %K<\/em>, the quick one, and %D<\/em>, the slow one. The values vary from 0% to 100%; at the levels of 20% and 80% signal lines, defining the oversold (0-20%) and overbought (80-100%) areas, are drawn.<\/p>\n\n\n\n

The Stochastic shows the capability of bulls<\/a> and bears<\/a> to set the closing price at the edge of the recent interval. If bulls manage to raise the prices during the day but fail to secure the closing price near the maximum, the Stochastic Oscillator starts falling, demonstrating the weakening of the bulls. If the closing price after the new minimums rises to the upper border of the range, it means that the bears have managed to pull the prices down but failed to secure them there. The growth of the Stochastic shows that the bears are not as strong as they seem.<\/p>\n\n\n\n

\"Description<\/a>
Description of the Stochastic Oscillator<\/figcaption><\/figure>\n\n\n\n

<\/span>Stochastic Oscillator calculation formula, characteristics and settings<\/a><\/span><\/h2>\n\n\n\n

The indicator is drawn in a separate window and consists of two lines:<\/p>\n\n\n\n