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Creator: George Lane
Stochastics is another popular indicator used by many traders and investors. Two lines plotted below the chart when we plot Stochastics indicator.
When the Stochastics indicator is at the upper range, it indicates that the recent price is at the upper range of the last five candles. If the Stochastics indicator is below the lower range, it means that recent prices are below the range of the last 5 candles.
Stochastics above 50% indicate that the current price is above the mid-range price. Therefore, rising Stochastics above 50% indicate bullish momentum, while falling Stochastics below 50% indicate bearish momentum.
Among the most popular parameters are 5,3,3 and 14,3,3.
Stochastics reading above 50% and a %K reading above %D indicates a bullish trend.
Stochastics reading below 50% and a %K reading below %D indicates a bearish trend.
Click here to learn more about this indicator.
The indicator table value in TradePoint & RZone also provides you with a list of all values of this indicator for any group of stocks. This will allow you to compare the readings of this indicator across different stocks.
This indicator is also available in the System Builder on RZone & TradePoint for all charting methods. Using the system builder, you can develop various strategies based on the different conditions already present in this indicator. Additionally, it can be used with other indicators or price patterns to develop effective trading strategies. For any group of stocks and market segments, you can scan and backtest stocks based on those strategies.
The indicator is applicable to all types of charting. It is calculated based on the number of columns on P&F charts, bricks on Renko charts, lines on Line-break charts, candles on Heikin-Ashi charts, and lines on Kagi charts. While the formula and reading of the indicators remain the same, they become more dynamic on these charts.