Stochastic Oscillator

Strategy guide

Overview

A stochastic oscillator is a momentum indicator comparing a particular closing price of an asset to a range of its prices over a certain period of time. The sensitivity of the oscillator to market movements is reducible by adjusting that time period or by taking a moving average of the result. It is used to generate overbought and oversold trading signals, utilising a 0-100 bounded range of values.

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