Stochastic Oscillator

[ProTrader]

the Stochastic Oscillator is a momentum indicator that shows the location of the close relative to the high-low range over a set number of periods. According to an interview with Lane, the Stochastic Oscillator "doesn't follow price, it doesn't follow volume or anything like that. It follows the speed or the momentum of price. As a rule, the momentum changes direction before price." As such, bullish and bearish divergences in the Stochastic Oscillator can be used to foreshadow reversals. This was the first, and most important, signal that Lane identified. Lane also used this oscillator to identify bull and bear set-ups to anticipate a future reversal. Because the Stochastic Oscillator is range bound, is also useful for identifying overbought and oversold levels.

[kasual]

very useful information and its make me get better understanding about the function of stochastic oscillator. previously I think this indicator follow the price movement and after read this thread, I become know that stochastic move based volume. its why sometimes I found the direction of stochastic and price different.

[rexway]

very useful information and its make me get better understanding about the function of stochastic oscillator. previously I think this indicator follow the price movement and after read this thread, I become know that stochastic move based volume. its why sometimes I found the direction of stochastic and price different.

yea the indicator is a volume indicator it help also sometime detect the trend.even when I first started forex trading i did not know what this is all about nor know much about it what i really know is that the indicator was just like every other indicator but latter discover the great use and action which oscillator holds.