Stochastics

From Traderpedia

Definition:
A momentum indicator that points out overbought/oversold levels.


High levels (above 70 or 80) are indications to enter short orders; low levels (below 30 or 20) are indications to buy. Like all oscillators, stochastics work best as a momentum indicator that measures the price of a security relative to its high/low range over a set period of time. The indicator fluctuates between 0 and 100, with readings below 20 considered overbought (bearish) and readings above 80 considered oversold (bullish).

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High levels (above 70 or 80) are indications to enter short orders; low levels (below 30 or 20) are indications to buy. Like all oscillators, stochastics work best as a momentum indicator that measures the price of a security relative to its high/low range over a set period of time. The indicator fluctuates between 0 and 100, with readings below 20 considered oversold (bullish) and readings above 80 considered overbouht(bearish).