Stochastic Oscillator
The stochastic oscillator measures where price closed relative to its range over a set period (usually 14). It oscillates between 0 and 100, with readings above 80 overbought and below 20 oversold.
Understanding the Concept
Stochastics are similar to RSI but more sensitive to price action. They're great for range-bound markets where you want to buy dips and sell rips. The indicator has two lines: %K (fast) and %D (slow). When %K crosses above %D in oversold territory, that's a buy signal. When %K crosses below %D in overbought territory, that's a sell signal. In trending markets, stochastics can stay overbought/oversold for extended periods—don't fade the trend just because the indicator is extreme.
Real-World Example
Ethereum ranges between $2,500 and $3,000. Stochastic drops to 15 (oversold) near $2,500 and %K crosses above %D. You buy. Stochastic hits 85 (overbought) near $3,000 and %K crosses below %D. You sell.
How Strykr Helps
Strykr's AI monitors Stochastic Oscillator signals across 5,000+ assets in real-time. Get instant alerts when significant patterns emerge, with context about market conditions and confluence factors.
Try Strykr Free