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Stochastic Stock Indicator Crossover Signals

One way to interpret the stock trading signals provided by the Stochastic Oscillator stock indicator is similar to a moving average crossover stock trading strategy. In the Stochastic oscillator stock indicator, a crossover stock signal happens when the %K and %D lines crossover. These crossover stock trading signals should be taken with scrutiny as, out of the stock trading stochastics oscillator trading signal interpretations discussed so far, they produce the most stock trading whipsaws. Whipsaws or False stock signals are especially common in the Fast Stochastic Oscillator Stock Indicator version.



Stochastic Oscillator Crossover Stock Trading Signals:



  • For a Sell stock trading signal, a stock trader looks for the %K line to move below the %D line.

  • For a Buy stock trading signal, a stock trader looks for the %K line to move above the %D line.

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



The Stochastic Oscillator Stock Indicator Center-line

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



Stochastic Oscillator Center-line Stock Trading Crossovers Signals

  • If the Stochastic oscillator stock indicator is staying below the center-mark (between 40%-50%) and crosses up, then it is an indication that the stock trading bulls are taking control of the stocks trading market.

  • If the Stochastic oscillator stock indicator is staying above the center-mark (around 50%-60%) and then crosses below the center-mark, it can be an indication that the stock trading bears have taken control of the stocks trading market.

 

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