3 Types of Stocks Trading Stochastic Indicators

Fast, Slow and Full Stochastic

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

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

Stochastic oscillator stocks indicator works based on the principle that:

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

Stochastic Oscillator stocks indicator shows the strength of the Stocks trends, and identifies times when a stocks is oversold or overbought.

Fast Stochastic Oscillator Stocks Indicator

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

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

Slow Stochastic Oscillator Stocks Indicator

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

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

Full Stochastic Oscillator Stocks Indicator

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

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

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