What Stochastic shows
Where the close sits inside the recent high-low range, from 0 to 100.
Indicator guide · Oscillators
Stochastic: what it shows, settings and how to read it.
Where the close sits inside the recent high-low range, from 0 to 100.
How it is calculated
%K shows where the close sits inside the high-low range of the last N candles, from 0 to 100. %D is a 3-period average of %K.
Usual settings
14, 3 and 3, with lines at 80 and 20.
How traders read it
Above 80 is overbought, below 20 oversold; crosses of its two lines give the signals.
Where it fails
Best in ranges; in trends it stays pinned at the extremes.
What to combine it with
A trend filter: in an uptrend traders only take the oversold signals, in a downtrend only the overbought ones.
Try Stochastic on a live chart
Sign in, open Genni Charts, press the "ƒx Indicators" button above the chart and choose Stochastic. Click its name on the chart to change the settings. It is free for every member.
More in "Oscillators": RSI · MACD · Stochastic RSI · CCI · Williams %R · ROC · All 25 indicators
Questions
Frequently asked questions
What is the Stochastic indicator?
Where the close sits inside the recent high-low range, from 0 to 100.
What are the best settings for Stochastic?
The usual settings are: 14, 3 and 3, with lines at 80 and 20. No setting is best in every market, so test a change on past data before relying on it.
Is Stochastic reliable on its own?
No single indicator is. Best in ranges; in trends it stays pinned at the extremes. Most traders use it together with: A trend filter: in an uptrend traders only take the oversold signals, in a downtrend only the overbought ones.
How do I add Stochastic to a chart for free?
Sign in, open Genni Charts, press the "ƒx Indicators" button above the chart and choose Stochastic. Click its name on the chart to change the settings. It is free for every member.
This page is education, not investment advice. Trading involves substantial risk of loss. Read next: Trading indicators · Trading strategies · Candlestick patterns