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3 Types of Stock Stochastic Indicators


Fast, Slow and Full Stochastic

There are three types of Stock Stochastic Oscillator Stock Indicators: fast, slow and full stochastic oscillator indicator.

All the 3 versions of this stochastic oscillator stock indicator look at a given period for example the 10-day period, and measure how today's stocks price close compares to the high and low range of the time period that is being considered in the stock trading calculation of stochastic oscillator.


Stochastic oscillator stock indicator works based on the principle that:


  • During an upward stock trend, stocks price action tends to close at the high of the candle.

  • During a downward stock trend, stocks price action tends to close at the low of the candle.


Stochastic Oscillator stock indicator shows the strength of the Stock trends, and identifies times when a stock trading is oversold or overbought.



Fast Stochastic Oscillator Stocks Trading Indicator


Fast Stochastic Oscillator Stocks Trading Indicator - fast stochastic oscillator stock indicator plots two lines, one solid and one dotted on the indicator section. These two lines are called the %K line and %D line. In this versions the %K and %D lines are calculated differently from the other versions, so as to add extra smoothing.


One disadvantage of using this fast stochastic stock indicator version is that the %K and %D lines are too sensitive and they often give stock trading whipsaws when they get to the overbought and oversold levels. The fast stochastic lines are prone to fake stock trading signals/whipsaws.



Slow Stochastic Oscillator Stocks Trading Indicator

Slow Stochastic Oscillator Stocks Indicator - slow stochastic oscillator stock indicator smoothes out the stocks price data used for the original calculation and it is used by many Stock traders. This slow stochastic stock indicator version is less prone to whipsaws compared to the fast stochastic version.


For the slow stochastic stock indicator. a 3 period moving average is used to smooth out the stochastic lines. The moving average is not that of the stocks price action but of the stochastic oscillator indicator lines data.



Full Stochastic Oscillator Stocks Trading Indicator

Full Stochastic Oscillator Stocks Trading Indicator - this stochastic oscillator does not use a fixed moving average period, like the slow stock trading stochastic oscillator version above. Stock traders don’t want to use a fixed setting to calculate the stochastic stock indicator.

Because of this reason the full stochastic was developed by stock traders and it is more flexible than the earlier two stock trading stochastics oscillator versions.

Full stochastic oscillator stock indicator version allows stocks traders to choose the period they want for the fast and slow stock trading stochastic indicator line.

 

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