3 Types of Stock Stochastic Indicators

Fast, Slow & Full Stochastic

There are three types of Stock Stochastic Oscillator Indicators: fast, slow & full stochastics.

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

Stochastic oscillator indicator works based on the principle that:

• During an upward 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 indicator shows the strength of the trends, & identifies times when a Indices currency is oversold or overbought.

Fast Stochastic Oscillator Indicator

Fast Stochastic Oscillator Indicator - fast stochastic oscillator 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 editions the %K & %D lines are calculated differently from the other editions, so that to add extra smoothing.

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

Slow Stochastic Oscillator Indicator

Slow Stochastic Oscillator Indicator - slow stochastic oscillator indicator smooths out the price data used for the original calculation and it's used by many Stock traders. This slow stochastic Indices indicator edition is less prone to whipsaws compared to the fast stochastic version.

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

Full Stochastic Oscillator Indicator

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

Because of this reason the full stochastic was developed by traders & it's more flexible than the earlier two stochastics oscillator editions.

Full stochastic oscillator indicator edition allows Stock traders to choose the period they want for the fast & slow stochastic indicator line.