General TradingS

Stochastic

A momentum indicator that compares an asset's closing price to its price range over a specified period, generating values between 0 and 100. Readings above 80 indicate overbought conditions, while readings below 20 suggest oversold conditions.

Example

“The 14-period stochastic dropped below 20 while the stock sat at a key support level, prompting the trader to look for a bullish crossover signal to enter a long position.”