Stochastic Oscillator

What is stochastics oscillator?


Stochastics oscillator is a momentum indicator that computer relationship between a securities current price and its recent price range. It was introduced in the 1950 by George si Leni this is called father of statistics. It provides a relation value to current price.it express or train in relationship to a 14 period range of price extremes. It does not track price or volume but the momentum of price movement
Stochastic oscillator

How to calculate stochastics oscillator?

the stochastic oscillator consists of two separate lines termed percentage K which is per 14 period value and percentage D a three sessions moving average of percentage K.
100[(C-L14)/(H14-L14)]=%K
%K3/3=%D 
C=most decent closing price
L14=lowest price among the previous 14 session
H14=highest price among the previous 14 session
%K=14 period stochastic value line
%K3=the three most recent sessions
%D=three session moving average of%K
How to interpret stochastics process?
A stochastic process is a family of random variable that may include price and time as well as potentially random sequence of price movement. The oxygenated is interpreted on comparison between the most recent closing price and 14 period analysis of the lowest close and the highest close.the outcome of the calculation plays the most recent close in proximity to the 14 period extremes.as a result of the trend found in the stochastic oscillator trader can discover bullish or bearish reversal.because the indicator is found between 0 and 💯 it is also valuable for identifying overbought or over sold condition.
The calculation is designed to track 14 periods usually representing day or other increment of trading session. This can be increased or decreased to adjust what it reversals or to to alter the responsiveness of the calculation tu price moment. When the line moves above 80 it is a signal the price is overbought and is due for downward reversal.when below 20 signals of bull reversal and oversold condition like other range bound oxylator the period employed and the is zoomed overbought aur oversold level can be adjusted.

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