Community Forex Questions
Formula for the Stochastic Indicator
This is how you can compute for the stochastic indicator:
%K = 100(C - L14) / (H14 - L14)
where:
>C = the most recent closing price of the instrument
> L14 Represents the instrument's lowest price over the last 14 days.
>H14 Indicates the instrument's highest price during the last 14 days.
%K = 100(C - L14) / (H14 - L14)
where:
>C = the most recent closing price of the instrument
> L14 Represents the instrument's lowest price over the last 14 days.
>H14 Indicates the instrument's highest price during the last 14 days.
The Stochastic Indicator is a momentum oscillator that compares a security’s closing price to its price range over a specified period. It helps identify overbought and oversold conditions. The formula is:
%K = [(Close - Lowₙ) / (Highₙ - Lowₙ)] × 100
Where:
Close is the most recent closing price
Lowₙ is the lowest price in the last n periods
Highₙ is the highest price in the last n periods
The typical value for n is 14 periods. A second line, %D, is a 3-period simple moving average of %K, used as a signal line. Values above 80 typically suggest overbought conditions, while values below 20 indicate oversold conditions.
%K = [(Close - Lowₙ) / (Highₙ - Lowₙ)] × 100
Where:
Close is the most recent closing price
Lowₙ is the lowest price in the last n periods
Highₙ is the highest price in the last n periods
The typical value for n is 14 periods. A second line, %D, is a 3-period simple moving average of %K, used as a signal line. Values above 80 typically suggest overbought conditions, while values below 20 indicate oversold conditions.
Apr 13, 2022 10:53