Definition of stochastic oscillator

En teknisk momentumindikator som jämför ett värdepappers stängningspris med dess prisintervall under en given tidsperiod. En stokastisk oscillator känslighet för marknadsrörelser kan minskas genom att justera tidsperioden eller genom att ta ett glidande medelvärde av resultatet. Denna indikator beräknas med följande formel:

A technical momentum indicator that compares the closing price of a security with its price range over a given period of time. The sensitivity of a stochastic oscillator to market movements can be reduced by adjusting the time period or by taking a moving average of the result. This indicator is calculated using the following formula: %K = 100[(C – L14)/(H14 – L14)] C = the last closing price L14 = the lowest of the 14 previous trading sessions H14 = the highest price traded during the same 14-day period %D = 3-period moving average of %K

Investopedia explains “Stochastic Oscillator”

The theory behind this indicator is that in an upward market, prices tend to close near their high, and during a downward market, prices tend to close near their low. Transaction signals occur when %K passes through a three-period moving average called “%D”

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