Stochastic Indicator Crossover Signals

One way to interpret the Stock Indices trading signals provided by the Stochastic Oscillator Indices indicator is similar to a moving average crossover Indices trading strategy. In the Stochastic oscillator Indices indicator, a crossover Indices signal happens when the %K & %D lines crossover.

These crossover Indices signals should be taken with scrutiny as, out of the Stock Indices stochastics oscillator trading signal interpretations discussed so far, they produce the most Stock Index trading whipsaws. Whipsaws or False Stock Indices trading signals are especially common in the Fast Stochastic Oscillator Technical Indicator edition.

Stochastic Oscillator Crossover Signals:

• For a Sell Stock Indices signal, a trader looks for the %K line to move below the %D line.
• For a Buy Stock Index signal, a trader looks for the %K line to move above the %D line.

Since stochastic crossovers Stock Indices trading signals of %K & %D are often unreliable, they should be verified with other Indices technical indicators.

The Stochastic Oscillator Technical Indicator Center-line

The stochastic oscillator center-line lies at the 50% level in the stochastic Stock Indices indicator panel. It implies that there is a balance between bulls and bears. Situations when the stochastic Stock Indices indicator crosses the center-line can give an insight into whether the buyers or sellers will begin to control the Stock Indices market trend.

Stochastic Oscillator Center-line Stock Indices Trading Crossovers Signals

• If the Stochastic oscillator Indices indicator is staying below the center-mark (between 40%-50%) & crosses up, then it's an indication that the Stock Indices bulls are taking control of the Stock Indices market.
• If the Stochastic oscillator Indices indicator is staying above the center-mark (around 50%-60%) & then crosses below the center-mark, it can be an indication that the Stock Indices bears have taken control of the Stock Indices market.