3 Types of Forex Stochastic Indicators

Fast, Slow & Full Stochastic

There are three types of Forex Stochastic Oscillators: fast, slow and full stochastic technical indicator.

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

Stochastic oscillator indicator works based on the principle that:

During an upwards trend, price action tends to close at the high of the candle.
During a downward trend, price action tends to close at the low of the candle.

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

Fast Stochastic Oscillator Technical Indicator

Fast Stochastic Oscillator Technical Indicator Trading Indicator - fast stochastic oscillator technical indicator plots 2 lines, one solid and one dotted on the technical 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 editions, so that to add extra smoothing.

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

Slow Stochastic Oscillator Trading Indicator

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

For the slow stochastic technical indicator. A 3 period MA is used to smooth out the stochastic lines. The moving average isn't that of the market price action but of the stochastic trading indicator lines data.

Full Stochastic Oscillator Trading Indicator

Full Stochastic Oscillator Trading Indicator Trading Indicator - this stochastic oscillator technical indicator does not use a fixed MA period, like the slow stochastic oscillator trading version above. Traders don’t want to use a fixed setting to calculate the stochastic trading indicator.

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

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

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3 Types of Forex Stochastic Indicators