How Stochastic Oscillator Indices Indicator Works

The Stochastic oscillator stock indices indicator uses time periods to calculate the fast & slow lines. The number of time periods used to calculate the %K & %D line depends on what purpose a trader is using the Stochastic oscillator stock indices indicator for.

• A trader using the Stochastic oscillator stock indices indicator in combination with a indices trend indicator to see overbought & oversold levels, one-can use periods 10 periods.
• The default period used by stochastic indices oscillator indicator is 12.

Traders should not use stochastic stock indices indicator alone for making indices trading decisions, but should use this Stochastic oscillator stock indices indicator in combination with other indices technical indicators.

In ranging stock indices markets this Stochastic oscillator stock indices technical indicator can be used to show over-sold/over-bought levels as potential profit-taking points when trading the stock indices trading market.

Oversold & overbought indices trading levels by default are 20 and 80, but other indices traders use 30 & 70.

To look for 'overbought' region at the indicator's 80% stochastic indices trading oscillator mark is used

To look for 'oversold' region 20% stochastic indices trading oscillator mark is use.

The overbought & oversold levels are displayed as dotted horizontal lines on the stochastic oscillator stock indices indicator. These levels can also be adjusted to the 30 and 70 levels.

Overbought & Oversold Levels on Stochastic Oscillator Technical Indicator