3 Types of Oil Trading Stochastic Indicators

Fast, Slow & Full Stochastic

There are three types of Oil Stochastic Oscillator Indicators: fast, slow and full stochastic oscillator indicator.

All the 3 versions of this stochastic oscillator oil indicator look at a given period for example the 10-day period, and measure how today's crude oil price close compares to the high and low range of the time period that is being considered in the oil trading calculation of stochastic oscillator.

Stochastic oscillator oil technical indicator works based on the principle that:

• During an upward oil trend, crude oil price action tends to close at the high of the candle.
• During a downward oil trend, crude oil price action tends to close at the low of the candle.

Stochastic Oscillator indicator shows the strength of the Oil Trading trends, & identifies times when a oil trading is oversold or overbought.

Fast Stochastic Oscillator Technical Indicator

Fast Stochastic Oscillator Technical Indicator - fast stochastic oscillator oil indicator plots 2 lines, one solid and one dotted on the indicator section. These 2 lines are called the %K line & %D line. In this editions the %K & %D lines are calculated differently from the other editions, so as to add extra smoothing.

One disadvantage of using this fast stochastic oil indicator version is that the %K and %D lines are too sensitive and they often give oil trading whipsaws when they get to the overbought and oversold levels. The fast stochastic lines are prone to fake oil trading signals/whipsaws.

Slow Stochastic Oscillator Technical Indicator

Slow Stochastic Oscillator Crude Oil Indicator - slow stochastic oscillator oil indicator smoothes out the crude oil price data used for the original calculation and it is used by many Oil traders. This slow stochastic oil indicator version is less prone to whipsaws compared to the fast stochastic version.

For the slow stochastic oil indicator. A 3 period moving average is used to smooth out the stochastic lines. The moving average is not that of the crude oil price action but of the stochastic oscillator indicator lines data.

Full Stochastic Oscillator Technical Indicator

Full Stochastic Oscillator Technical Indicator - this stochastic oscillator does not use a fixed moving average period, like the slow oil trading stochastic oscillator version above. Oil traders don’t want to use a fixed setting to calculate the stochastic oil trading technical indicator.

Because of this reason the full stochastic was developed by oil traders and it is more flexible than the earlier two oil trading stochastics oscillator versions.

Full stochastic oscillator oil indicator version allows crude oil traders to choose the period they want for the fast and slow oil stochastic indicator line.