Trade Bitcoin Trading

3 Types of Bitcoin Stochastic Indicators

Fast, Slow and Full Stochastic

There are 3 kinds of Bitcoin Stochastic Oscillator Crypto Indicators: fast, slow, and complete stochastic technical indicator.

All three variations of this stochastic oscillator trading methodology examine a set number of periods, such as a 10-day window, and assess how the closing price of Bitcoin on the current day relates to the highest and lowest price ranges observed throughout that specific timeframe utilized in the stochastic oscillator calculation for Bitcoin trading.

Stochastic oscillator indicator works based on the principle that:

  • During an upward bitcoin crypto trend, bitcoin price action tends to close at the high of the candle.
  • During a downward bitcoin crypto trend, bitcoin price action tends to close at the low of the candle.

The Stochastic Oscillator checks Bitcoin trend power. It spots when trades look oversold or overbought.

Fast Stochastic CryptoCurrency Indicator

The Fast Stochastic Crypto Indicator, a fast stochastic oscillator, displays two lines on the indicator panel: one solid and one dotted, known as the %K and %D lines. This version calculates these lines differently from previous iterations, introducing a smoothing effect.

A notable drawback of this fast stochastic cryptocurrency indicator is its excessive sensitivity, which often leads to Bitcoin trading whipsaws when approaching overbought and oversold levels. The fast stochastic oscillator is vulnerable to generating false signals and whipsaws in Bitcoin trading.

Slow Stochastic Oscillator Technical Crypto Indicator

The slow stochastics indicator smooths the price data from the basic calculation. Many Bitcoin traders rely on it. This version cuts down on false signals more than the fast one.

Pertaining to the slow stochastic indicator for cryptocurrencies, a 3-period Moving Average (MA) is implemented to smooth the lines of the stochastic oscillator itself. It is crucial to note that this moving average is applied to the data derived from the stochastic lines, not the raw Bitcoin price movement.

Full Stochastic Crypto Indicator

Full Stochastic CryptoCurrency Indicator - this stochastic oscillator does not use a fixed moving average MA period, like the slow bitcoin trading stochastic oscillator version above. Bitcoin traders do not want to use a fixed setting to calculate stochastic bitcoin indicator.

Bitcoin traders created the full stochastic for more flexibility. It improves on the first two versions.

Full stochastic oscillator indicator version allows traders to choose the period they want for the fast & slow bitcoin trading stochastic indicator line.

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