How Stochastic Oscillator Technical Works

The Stochastic oscillator indicator uses time periods to calculate the fast and slow lines. The number of time periods used to calculate the %K and %D line depends on what purpose a forex trader is using the Stochastic oscillator trading for.

A trader using the Stochastic oscillator indicator in combination with a trend indicator to see overbought & oversold levels, one can use periods 10 periods.
The default period used by stochastic technical indicator is 12.

Forex traders should not use stochastic indicator alone for making decisions, but should use this Stochastic oscillator indicator in combination with other trading indicators.

In ranging markets this Stochastic oscillator technical indicator can be used to show oversold/overbought levels as potential profit taking points when trading the trading market.

Oversold and overbought levels by default are 20 and 80, but other traders use 30 and 70.

To look for 'overbought' region at the indicator's 80% stochastic forex oscillator mark is used

To look for 'oversold' region 20% stochastic forex oscillator mark is use.

The overbought & oversold levels are displayed as dotted horizontal lines on the stochastic oscillator trading indicator. These levels can also be adjusted to the 30 & 70 levels.

Overbought and Oversold Levels on Stochastic Oscillator

Overbought & Oversold Levels on Stochastic Oscillator Trading Indicator Technical Indicator

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How Stochastic Oscillator Technical Works