Element that collects information about the Price to generate two signals:

  • The signal %K indicates that within a range from 0 to 100 how oversold or overbought is the market. To calculate this the indicator uses the following formula:

%k(n) = (Close[1] –Min(n)/High(n)- Min(n) ). Highlighting the percentage level that we are now regarding the maximums and minimums of the selected period

  • The signal %D that shows the average regarding the value of %K

Finally, we have a parameter called “slowdown” that smooths the signal. As this value decreases, the faster answers back the indicator to market changes

A bullish stochastic signal will be produced when there is an upward cross of the averages, below a concrete level (by default -80)

A bearish stochastic signal will be produced when there is a downward cross of the averages, above a concrete level (by default -20)

The filter of levels can be chosen optionally