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| Stochastics targets overbought-oversold conditions within constricted ranges. But it also shows great versatility when applied to trending markets. The indicator uncovers acceleration-deceleration while its directional movement follows price swings and draws classic patterns. For example, look for Stochastics to print double bottom or top formations near important market swings. It may also display a 1-2-3 phenomenon while traversing the lower pane. It will thrust, pull back in a small wave and thrust again to the other side. And what exactly does a 5-3-3 setting for Stochastics represent? This translates into a 5 period %K smoothed by 3 periods, and a 3 period %D. |
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