Stochastics Flashcards
show you when investor’s sentiment changes from being bullish to bearish and from being bearish to bullish.
Stochastics
Who developed Stochastics
George Lane
It measures price momentum to identify overbought/oversold conditions, which gives entry or exit
decisions.
Stochastics
When stoicism forms narrow top, it indicates ___________
weakness bulls
when it forms a narrow bottom it indicates a ___________.
weakness bear
The stochastic indicator is plotted as two lines, _____________.
%K and %D
When %K is _________, it shows the prices may be overbought and may be reversing trend shortly.
above 80
When %K is ___________, it shows the prices may be oversold and may be reversing trend shortly.
below 20
When %K line crosses above %D line , ______________ is generated and
buy signal
When %K line crosses below %D line , a ___________ is generated.
sell signal
Stochastic can be used with several interpretations:
- divergences
- crossovers and
- overbought/oversold.
