Dear All
Can anybody give me details for Stochastic Oscillator.
How Can calculate it manually and how to interprete it.
thanks
Interpretation: The stochastic typically ranges from 20 to 80. However, some traders also modify it and use it from 30 to 70. When the oscillator is below the 20 (30) level, then the stock is assumed to be in oversold region. However, when the oscillator is above 80 (70) region, then the stock is assumed to be overbought.
Word of Caution: Stochastic is a very poor indicator in trending market. The oscillator will remain in the oversold region during down trend whilst the stock continues to decline and during uptrend the oscillator will remain in overbought zone and the stock will continue to rally.
Best time to use it: Stochastic oscillator is best used during range bound sessions. When the stock operates in a range (non-trending), then stochastic oscillator is quite efficient in the overbought and oversold zones