3 Types of Trading Stochastic Indicators

Fast, Slow & Full Stochastic

There are 3 types of Stochastic Indicators: fast, slow and full stochastic oscillator.

All the 3 versions of this stochastic oscillator stocks 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 stocks calculation of stochastic oscillator.

Stochastic oscillator stocks technical 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 stocks is oversold or overbought.

Fast Stochastic Oscillator Technical Indicator

Fast Stochastic Indicator - fast stochastic oscillator stocks indicator plots 2 lines, one solid and one dotted on the indicator section. These 2 lines are called the %K line & %D line. In this editions the %K & %D lines are calculated differently from the other editions, so as 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 stocks whipsaws when they get to the overbought and oversold levels. The fast stochastic lines are prone to fake stocks trade signals/whipsaws.

Slow Stochastic Oscillator Technical Indicator

Slow Stochastic Oscillator Stock Indicator - slow stochastic oscillator stocks indicator smoothes out the stocks price data used for the original calculation and 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 indicator. A 3 period moving average is used to smooth out the stochastic lines. The moving average is not that of the stocks price action but of the stochastic oscillator lines data.

Full Stochastic Oscillator Technical Indicator

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

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

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