3 Types of Stock Indices Trading Stochastic Indicators

Fast, Slow & Full Stochastic

There are three types of Stock Indices Stochastic Oscillator Indicators: fast, slow & full stochastics.

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

Stochastic oscillator Stock Indices indicator works based on the principle that:

• During an upwards Indices trend, Stock Index price action tends to close at the high of the candle.
• During a downwards Indices trend, Stock Index price action tends to close at the low of the candle.

Stochastic Oscillator Stock Indices trading indicator shows the strength of the Indices trends, & identifies times when a Indices currency is oversold or overbought.

Fast Stochastic Oscillator Indicator

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

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

Slow Stochastic Oscillator Indicator

Slow Stochastic Oscillator Indicator - slow stochastic oscillator Stock Indices indicator smooths out the price data used for the original calculation & it is used by many Stock Index traders. This slow stochastic Indices indicator version is less prone to whipsaws compared to the fast stochastic edition.

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

Full Stochastic Oscillator Indicator

Full Stochastic Oscillator Indicator - this stochastic oscillator doesn't use a fixed moving average period, like the slow Stock Index stochastic oscillator version above. Traders don’t want to use a fixed setting to calculate the stochastic Indices indicator.

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

Full stochastic oscillator Stock Indices indicator version allows Stock Index traders to choose the period they want for the fast and slow Stock Index stochastic indicator line.