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3 Types of XAUUSD Trading Stochastic Indicators

Fast, Slow and Full Stochastic

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

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

Stochastic oscillator xauusd indicator works based on the principle that:

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

Stochastic Oscillator xauusd indicator shows the strength of the XAUUSD trends, and identifies times when a xauusd is oversold or overbought.

Fast Stochastic Oscillator XAUUSD Indicator

Fast Stochastic Oscillator XAUUSD Indicator - fast stochastic oscillator xauusd 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 xauusd indicator version is that the %K and %D lines are too sensitive and they often give xauusd whipsaws when they get to the overbought and oversold levels. The fast stochastic lines are prone to fake xauusd signals/whipsaws.

Slow Stochastic Oscillator XAUUSD Indicator

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

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

Full Stochastic Oscillator XAUUSD Indicator

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

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

Full stochastic oscillator xauusd indicator version allows gold traders to choose the period they want for the fast and slow xauusd stochastic indicator line.

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